“Midway through the year, we are starting to see a return to more normal patterns, although performance is a bit weaker.”
–Sara Hoffmann, Director of Multifamily Research at Freddie Mac.
Tag: Quote
CMF Quote of the Week: July 6, 2023
“Commercial real estate is a vast and varied market – with buildings, and loans, spread across property types, markets, classes, vintages and much, much more. While changes in interest rates, uncertainty about property values and questions about some property fundamentals have led to significant slowdowns in sales and mortgage origination activity in recent quarters, it’s important to remember that not all properties will be affected in the same ways.”
–From MBA’s Chart of the Week, Office Property Sales Volumes and Values
CMF Quote of the Week
“Real estate markets offer a solid, long-term investment and income stream once pricing levels are clearer…We anticipate investment activity to pick up as central banks end rate hikes and greater economic certainty emerges. In the meantime, investors will remain on the lookout for bargains, with significant funds being drawn up to act.”
—-Tony Horrell, Head of Global Capital Markets with Colliers.
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“Volatile capital markets and a rise in the 10-year Treasury rate drove a contraction in multifamily lending in 2022 that will persist into 2023. Economic uncertainty and rising prices have led to waning housing demand. This paired with elevated construction levels will drive rent growth to level off and eventually normalize.”
–Steve Guggenmos, Vice President of Research & Modeling for Freddie Mac Multifamily.
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“Commercial and multifamily mortgages continued to perform well through the third quarter. A much smaller share of loans backed by the property types hardest hit at the onset of the pandemic–lodging and retail–were delinquent. For those property types, very few new loans faced difficulties and lenders continued to work through those that had. Additionally, loans backed by property types that have been performing well throughout the pandemic including multifamily, industrial and office continued to see few delinquencies.”
–Jamie Woodwell, MBA Vice President of Commercial Real Estate Research.
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“A continuing slowdown in across-the-board leasing velocity reflects mounting concerns among small businesses that economic conditions will get worse before they get better. The Federal Reserve appears hellbent on taming the inflation tiger, and the current regime of interest rate hikes has taken the air out of the proverbial balloon, has raised market risks and may level potentially punishing effects on all commercial real estate market participants.”
–Boxwood Means Principal and Co-Founder Randy Fuchs.
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“We continue to see significant changes, volatility and uncertainty in the space, equity and debt markets that drive commercial real estate values and transaction volumes.” –Jamie Woodwell, MBA Vice President for Commercial Real Estate Research.
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“Respondents point to sustained high inflation, workforce management, cyber risk and climate-regulated regulatory action as issues that will have the most impact on revenues over the next 12 to 18 months. Unfortunately, most respondents do not think the industry is fully prepared to respond to some uncertainties.”
–Deloitte, in its new Commercial Real Estate Outlook.
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“The increase in holdings by depositories was the largest on record. The data match the fact that the first half of 2022 saw more commercial and multifamily borrowing and lending than any previous January through June period.”
–Jamie Woodwell, MBA Vice President of Commercial Real Estate Research
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“Thanks to a very tight labor market and technological advances, hybrid work reigns two and a half years since the onset of the COVID-19 pandemic, with employees at many companies coming into the office a few days a week. The extent to which this trend will continue–and what it means for the office market–will greatly depend on employees’ and employers’ costs and benefits of being in the office versus remote, and whether a transition to a looser labor market tilts the bargaining table to employers and their preference for more in-person collaboration.”
–Mike Fratantoni, MBA Senior Vice President and Chief Economist.