The office sector is showing signs of balance between supply and demand, as companies have adjusted their lease commitments and are urging employees to return to the office.
Industrial leasing likely will improve, though all markets won’t benefit equally
Industrial real estate has faced challenges for the past two years as the pandemic-era e-commerce boom and strong consumer spending triggered a burst of construction activity. Leasing activity is expected to improve this year, especially if the Federal Reserve follows through on anticipated interest rate cuts. All markets, however, won’t fare equally.
There are several ways the industry looks at capitalization rates (cap rates) for commercial properties. Comparing them considering the current generational shift in cap rates is helpful for understanding pricing.