Richard Hill’s Post

Question: for those of us in the CRE transaction support business, what is the best leading edge indicator? REIT stocks? The 10-year T-bill? The Fed? Please leave your vote or suggestions in the comments?

Its all about experience nowadays (sometimes a bit over the top😉). And that drive for experience has come at a cost as one of the main drivers behind inflation. Later this week, the #ECB will raise interest rates possibly for the last time as inflation is being brought under control increasingly. And this is good news for all looking for an end to market illiquidity on the real estate investment market. That does not mean all markets and sectors will move at the same speed thereafter, but more evidence of new pricing levels are expected soon after the holiday break. CBRE | #cbre

“Cap rates are seen more as a result of financing cost and less as a function of supply and demand, he believes that the majority of the impact is behind us, interest rates will raise at a slower paste, flatten or even retreat in the next 24 months. It is our observation that cap rates will lag slightly behind but will likely adjust accordingly by about one quarter after rates stabilize at a lower level- Looking back to the last market downturn, the Federal Reserve began cutting its policy rate approximately 18 months before cap rates peaked. The Fed Funds’ effective rate reached about 5.25% in 2007 before cutting to near zero, and it wasn’t until 2009 that cap rates hit their ceiling. The rapidly escalating cost of capital and the associated upward adjustment to capitalization rates will likely stabilize in the first half of 2023,” Liston said. “Once there is stabilization in capital costs, investors should breathe a sigh of relief, and capitalization rates should stabilize in kind. “Moving forward into 2024 there would likely be a reversion to capital costs and capitalization rates perhaps not to rates that would mirror the averages of 2018-2022 but certainly more in line with those averages.” Great read and perspective on todays market and opportunities available.

The U.S. industrial market performance continues to downshift heading into 2024. Net absorption has remained positive but is continuing to lose steam. One silver lining? Early signs of stabilization and eventual recovery in tenant demand are already emerging.

The U.S. industrial market performance continues to downshift heading into 2024. Net absorption has remained positive but is continuing to lose steam. One silver lining? Early signs of stabilization and eventual recovery in tenant demand are already emerging.

The median price rose 3.0% during the pandemic year of 2020, surged 24.5% in 2021, contracted 4.9% in 2022 and then climbed another 8.1% in 2023, according to CoreLogic. The median price for the combined capitals ended 2023 at record levels, while the combined regions were just 1.5% off peak. Is now the time for you to buy property? Let's chat: 0414 710 251 or Mason@fulhamfinance.com.au

The U.S. industrial market performance continues to downshift heading into 2024. Net absorption has remained positive but is continuing to lose steam. One silver lining? Early signs of stabilization and eventual recovery in tenant demand are already emerging.

Despite challenges in the past year, our 2024 Real Estate report suggests that the market may be improving. In 2024, 89% of surveyed respondents said they were optimistic for the long-term outlook, compared to 48% the year before. Read it here: https://ow.ly/XiGO50RpYvG #realestate #inflation #insights

MSCI Real Assets said Thursday that U.S. commercial property prices fell again in May, at an annual pace of decline similar to the rate seen in April. The RCA CPPI National All-Property Index dropped 2.3% from a year ago and fell 0.2% from April, reported Connect CRE. “Property sectors continued on different pricing paths in May,” according to MSCI Real Assets’ monthly report. “Those with stronger fundamentals have outperformed others in the higher interest rate environment.” "Industrial sector was the only property type to post positive annual and monthly change in May, rising 8.7% from a year earlier and 0.9% from April. Using the monthly change to annualize the growth rate shows an even steeper increase of 11.1%. Office led price declines once again in May, dropping 16.9% year-over-year. Declines for CBD office pricing were nearly three times as steep as those for suburban properties." https://lnkd.in/gwhxkNWR #unitedstates #CRE #pricing #drop

Despite challenges in the past year, our 2024 Real Estate report suggests that the market may be improving. In 2024, 89% of surveyed respondents said they were optimistic for the long-term outlook, compared to 48% the year before. Read it here: https://ow.ly/GmWQ50Rp5xU #realestate #inflation #insights