Fundamentals Still Matter

May 2, 2023, 13:55 PM by Matt Mowell

Commercial real estate (CRE) is facing cyclical headwinds. Asset values have eroded this year due to the impact of rising interest rates and cap rates on equity and debt availability and underwriting. The stark interest rate risk has overshadowed CRE fundamentals for the time being. But we expect values will begin stabilizing later this year.
Looking for green shoots? Watch the credit cycle

Apr 21, 2023, 13:46 PM by Michael Leahy

Just as velocity of money (nominal GDP/money supply) is an important driver of monetary inflation, a greater influx of cash flow into commercial real estate (CRE) is a fundamental driver of property value appreciation.
24/7 Neighborhoods Offer Reprieve for Beleaguered Urban Office Markets

Apr 17, 2023, 09:40 AM by Matt Mowell

‘Live-Work-Shop’ neighborhoods are providing a silver lining for the beleaguered office sector. Many prominent Live-Work-Shop neighborhoods are outperforming the broader market in which they reside.
The Zoom Housing Boom is Coming to An End in the U.S.

Apr 11, 2023, 15:21 PM by Matt Mowell

The Federal Reserve’s aggressive rate hikes have stalled national home price appreciation and even caused notable declines in some markets.
Small banks have larger real estate exposure

Apr 5, 2023, 10:20 AM by Matt Mowell

Today, according to the Federal Reserve, commercial real estate loans comprise 43% of smaller banks’ assets. Encouragingly, deals were underwritten at more conservative LTVs than in the years before the Global Financial Crisis, and valuations have grown significantly over the past decade— up 42% for multifamily and 14% for office. This provides some cushion for regional banks amid higher cap rates.
Retail space is continuing to right-size

Mar 27, 2023, 14:18 PM by Daniel Diebel

Had retail space been overbuilt in previous cycles? Is it just now reaching supply-demand equilibrium?
The Rise and Fall of Office to Multifamily Conversions: A Real Estate Investigation

Mar 20, 2023, 14:21 PM by Dennis Schoenmaker

Office-to-multifamily (OTM) conversions is a popular topic in the media, but rare, and unlikely to impact the bottom line of either sector.
Consumer debt unlikely to derail summer vacations

Mar 17, 2023, 14:54 PM by Matt Mowell

Fiscal stimulus is in the rear-view mirror, excess savings are quickly dwindling and consumers must contend with higher interest rates.
Identifying U.S. Metros that Benefit from Rising Manufacturing Employment

Mar 15, 2023, 20:56 PM by Matt Mowell

Products manufactured in the U.S., and the markets where they are manufactured, continues to evolve. Looking at how each metro’s share of U.S. manufacturing employment has changed since 2010 provides a glimpse into this evolution.
H2 2022 Cap Rate Survey Now Available

Mar 10, 2023, 10:14 AM by Dennis Schoenmaker

The CRS was conducted in mid-November and December and reflects second-half 2022 deals. The survey, reflecting 3,600 cap rate estimates, sheds light on how investor sentiment is changing amid uncertain market conditions.

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