Seyfarth Shaw: CRE Industry Optimistic for 2024

Seyfarth Shaw, Chicago, released its Real Estate Market Sentiment Survey, finding 83% of commercial real estate executives have a buoyant outlook for the sector this year.

The factors influencing that optimism include anticipated rate cuts by the Federal Reserve, indications of deceleration in inflationary pressures, good economic figures, the prospect of investing in distressed assets and details related to the 2024 presidential election.

However, executives surveyed remain concerned regarding the promise of rate cuts. Only 23% believed the Fed will decrease rates by more than 50 basis points–but 70% believed interest rate cuts would need to be over that mark to activate investor engagement.

Artificial Intelligence has been a hot topic in the industry, but respondents were split 50/50 on whether AI would play a role in their investment activity and operations.

Pricing is top-of-mind–more than 75% of respondents said pricing is a threshold condition to an active acquisition market.

A similar share–74%–said they plan to invest in distressed assets in 2024.

Despite significant changes in the remote work landscape the last few years, a majority of industry leaders now say the new workplace norms have not adversely impacted their profitability or loyalty.

Conversion projects (such as office buildings into housing) have been a trendy topic as of late. However, 61% of respondents said they are not likely to invest in such projects. But, 10% are likely or very likely.

Top concerns among those surveyed include the interest rate climate and the scarcity of debt financing. Fewer respondents were worried about a recession, but many still listed it as a concern.

Looking to the 2024 election, 47% said Donald Trump would be best candidate for the CRE industry. No. 2 was Joe Biden at 26% and Nikki Haley at 23%.