The commercial real estate (CRE) market is in a reset. Deal activity is down, and property prices are declining. We recently examined what clues history can provide about the potential length and depth of CRE price declines. Today, let’s examine what current CRE fundamentals can tell us about where we are in the process of resetting.

The data is clear – commercial real estate (CRE) property prices are undergoing an adjustment. With that in mind, many industry professionals and investors are asking the next logical questions – how far will prices fall and when will prices bottom out and recover. Examining historical CRE data offers some clues, but, as the old adage goes, ...

Securing commercial real estate (CRE) financing in today’s market is no easy task. After the three bank failures this year, which triggered increased regulatory scrutiny of bank-held CRE loans, banks have pulled back on lending. This is especially true for riskier varieties of lending, such as construction loans, which involve assets that are not ...

Building a property from the ground up entails substantially more risk than purchasing an existing building that is already generating income. Likewise, financing construction is riskier than lending against existing structures since development projects don’t generate income to pay loan interest until they are completed. For this reason, most ...

In times of economic uncertainty, people tend to stay put. After all, why take on new financial obligations, like an apartment lease, when the future is less certain? Today, though unemployment remains low, inflation remains high, and the recent slew of layoffs at tech companies has many worried about their own financial position. The recent, ...

When most people think of a loan, they think of a bank. Banks take deposits from customers in return for interest payments or other services. The bank then invests those deposits in loans, such as commercial real estate (CRE) loans, and securities that pay a higher interest rate than the bank is paying on the deposits. However, a bank is not the ...

After the recent bank failures, a good deal of attention has been paid to commercial real estate (CRE) debt held by banks of different sizes. But banks aren’t the only CRE lenders. Insurance companies, mortgage REITs, and private debt funds that lend investors’ money also regularly make CRE loans. Taken together, banks of all sizes only account ...

At first glance, converting old office buildings into apartments seems like an obvious solution to two pressing real estate challenges. There’s a national housing shortage of several millions of housing units, and office space is substantially underutilized due to the adoption of remote work. Declining office use is a significant risk to office ...

Retail real estate remains a challenged asset class, although locations catering to experiential services so far appear to be more resilient than others. Even before the onset of the pandemic, the rise of eCommerce and the shift away from mall culture created an uncertain outlook for many types of retail locations. In this month’s X-Factor, let’s ...

The performance of retail real estate is closely tied to consumer spending trends. Over the last year, consumers have benefitted from meaningful wage growth, but inflation has erased most of those gains. Similarly, despite nominal retail sales growing by approximately 5.4 percent in February, retail spending in real terms has fallen over the last ...