CRE industry conditions and sentiment survey - US Q1 2024 results
Gain insights into the market sentiment, conditions, metrics, and issues affecting the US commercial real estate industry based on our Q1 2024 survey.
Key findings
Current focus
Near-term capital deployment increasingly primary focus, with US respondents indicating they expect to be deploying capital in the next 6 months surged from 7% in Q4 2023 to 25% in Q1 2024.
Competition and pricing
The perception of overpricing in the real estate market has decreased by 21 percentage points from the prior quarter, indicating that current pricing may have adjusted and perceived as fair.
Recession expectations
The percentage of respondents expecting a near-term recession decreased significantly from Q4 2023, with the largest shift seen from "somewhat likely" to "somewhat unlikely" responses.
Cost of capital
Respondents expect lower debt financing costs and higher net returns to equity (net leveraged IRRs), with the biggest shifts seen in the Core-Plus and Value-Added strategies.
Property type performance
Industrial property to perform the best and office to perform the worst, with multifamily and self-storage experiencing slips in favorability.