More than half of investors in CBRE’s 2023 U.S. Investor Intentions Survey expect to buy fewer assets this year than in 2022 due to rising interest rates, potential recession and credit restrictions It says it does.
Nearly 60% of respondents expect to buy less property than they did last year, and almost half say they can cut their spending by 10% or more. According to the survey, only 15% expect to buy more than they did last year.
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Macroeconomic conditions that led to lower trading volumes in the second half of 2022 and uncertainty about the outlook for 2023 may cause commercial real investors to pause selling again this year.
MSCI Real Assets Investment revenue in October 2022 fell 43% year-on-year to $42.8 billion, the third consecutive month of year-on-year declines, according to the report. Price concerns, particularly widening bid-ask spreads between sellers and buyers, appear to be affecting sales plans as well. Nearly 60% of respondents said they would sell more property this year than last year, or not at all. Only 27% told CBRE that he expects to sell for the same amount as last year.
CBRE forecasts a 15% decline in total investment from 2022 as trading activity is expected to decline.
The Federal Reserve (Fed) will raise interest rates seven times in a row in 2022, raising the Federal Fund’s target rate range to 4.25-4.5% to curb inflation, which reached a nearly 40-year high last year. I was. The Fed, which aims to bring inflation back into the 2% range, is expected to call for another rate hike at least in early 2023, so the Fed rate could rise above 5% this year.
CBRE survey finds more investors expect to adopt opportunistic debt strategies this year than last year due to attractive returns from rising interest rates and tighter financial conditions . Many also expect to see price discounts of perhaps 30% or so across the commercial real estate sector, with shopping malls and value-added office properties expected to offer the biggest discounts.
According to CBRE research, multifamily homes, especially multifamily homes, and modern industrial and logistics facilities in key markets are expected to be the most sought-after assets to invest in in 2023. Retail investors prefer grocery-focused centers, while office investors follow the flight to quality trends, seeking primarily Class A assets in prime locations.
Nearly 70% of those surveyed said they have no plans to change their funding allocations this year due to market conditions. And most investors expect to invest in the well-performing Sunbelt markets, led by Texas, Miami, Los Angeles, Dallas-Fort Worth and Austin in Nashville, Tennessee.