Real estate investors expect to buy and sell more property this year, but Fed actions could alter plans
Real estate investors expect to buy and sell more property this year, but Fed actions could alter plans
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The recently released 2024 U.S. Investor Intentions Survey by CBRE Group Inc. (NYSE: CBRE) found more than 60% of respondents expect to purchase more real estate in 2024 than they did last year. That’s up from 16% of investors who responded similarly in last year’s survey.
Still, it’s unlikely there will be a massive buying spree in the coming months, or perhaps even at any point in 2024. The concern cited by most investors in the report — 87% of respondents — was higher-for-longer interest rates, a persistent worry as the U.S. labor market remains strong and inflation continues to hover around 3%. The Federal Reserve has a stated goal of reaching 2% inflation, and it’s signaled rate cuts are coming later this year.
Other top concerns for real estate investors this year, as cited in the CBRE survey, include tighter credit availability and loan terms, differing buyer and seller expectations, and an uncertain economic outlook. It illustrates how, despite interest rates being a key barometer to making more deals work, other economic conditions continue to weigh on commercial real estate investment decisions.
Multifamily and industrial real estate have emerged as the preferred asset classes for investment in 2024, according to the survey.
About 75% of respondents picked multifamily as a property type to invest in this year, followed by 40% who picked industrial and logistics facilities. Only 10% chose office real estate — a segment that faces the biggest challenges and threats of distress in the wake of pandemic-era changes to work.
Markets like Dallas-Fort Worth, Texas; Miami and south Florida; Raleigh-Durham, North Carolina; and Nashville, Tennessee, were among the top markets picked by investors for best expected total property returns in 2024.
https://www.bizjournals.com/cincinnati/news/2024/02/07/cbre-commercial-real-estate-investment-survey.html
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