2024 Commercial Real Estate Outlook

Ebook Sneak Peek⬇️

As we outlined in our 2023 Commercial Real Estate Outlook, market headwinds were expected to bear many challenges and opportunities. Yet over the past 12 months, it’s clear that positions eroded more severely than anticipated and the CRE industry experienced a significant downturn. Now, with 2023 logged, we’re looking forward and assessing what comes next. First, a look back at the catalysts that made 2023 uniquely difficult for commercial real estate:

• Pandemic hangover effects—remote/hybrid work and new migration patterns—led to largely empty office properties
• A five-day span in March resulted in a handful of bank failures, leading to turmoil
• Increasing inflation drove up the cost of virtually everything
• Capital was more costly under the twin hammers of rising interest rates and tighter monetary policy
• Higher costs meant private equity firms didn’t deploy as much capital
• Geopolitical instability—the ongoing war in Ukraine and the conflict in Israel—left investors more conservative
• The decline of commercial mortgage-backed securities with an increase in delinquencies

What it Means for 2024: These challenges won’t magically resolve when the calendar flips. How are these factors shaping CRE professionals’ outlook for the year ahead?

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