Every year for nearly two decades, we have looked forward to the annual Emerging Trends in Real Estate report by PwC and the Urban Land Institute, a comprehensive analysis of where the commercial markets are heading. The report is an economic forecast based primarily on the views of more than 1,400 industry professionals, and highlights best bets on the various real estate asset classes. We have put together our own survey to find out what commercial property investors are looking for in the coming year, and to provide a valuable communications tool to take advantage of opportunities that may be forthcoming. To take the survey, please CLICK HERE.
The ULI Emerging Trends report is an invaluable tool for planning the year ahead and providing resourceful information for colleagues and clients. Here are some of the top bullet points taken from this year’s report:
Risk of a more profound recession is growing
Cautious optimism that any downturn will be short lived.
Markets are actually “Normalizing”
Cap Rates are rising as asset prices and returns decline
Housing Market is Decelerating
Construction Starts Down
Buyers and Sellers are far apart on pricing
Sellers have not capitulated enough to recognize the new environment
Many investors have moved to the sidelines, or other assets like equities and bonds.
Fewer investors and lenders will be providing capital
Debt is getting more difficult to obtain
Cash is King
Could be a soft landing
Very little signs of distress
Balance sheets are generally strong
To see the full report and our comments click on 2023 EMERGING TRENDS
There are other elements of the ULI report that we intend to explore, such as the lack of interest in reinvigorating Central Business Districts (Downtown Main Streets), the future of office work and even the affect of climate change on commercial real estate.
As always, we believe commercial real estate should be a fundamental part of everyone’s investment portfolio, and a well thought out strategy is essential. Have a wonderful year in 2023. Let’s do some business!
Mike Donnelly
Brian Littrell
Jennifer Fortino