The Roundtable's Real Estate Capital Policy Advisory Committee (RECPAC) met this week to discuss the current state of credit and capital markets. The Urban Land Institute (ULI) and PwC US also provided data points about market fundamentals in their recently issued publication, Emerging Trends in Real Estate 2023.
Shift to “New Normal”
- RECPAC’s meeting in New York City focused on interest rate trends, global capital flows, and the implications for financing and property development. (For more information on RECPAC, contact Roundtable Senior Vice President Chip Rodgers or call 202-639-8400.)
- ULI-PwC reports that industry participants are cautiously optimistic amid diminishing pandemic tailwinds and the potential for a “short yet shallow” recession. (ULI, Oct. 28 | download 125-page report)
- The annual report—a compilation of data and insights from 2,000 real estate experts—shows the industry is:
- Reassessing the use of office space,
- Addressing climate change impacts and ESG demands,
- Experiencing a shift in investor sentiment and capital, and
- Facing new opportunities from government infrastructure spending.
- The report’s survey revealed bifurcated market trends, with some aspects of the industry reverting to pre-pandemic patterns as others shift to a “new normal” that includes remote work arrangements. (PWC website | download full report)
Asset Classes in Flux
- ULI Senior Vice President Anita Kramer commented that as people continue to adapt to pandemic-influenced changes in their lives, property asset classes are in flux as owners and investors assess how to move forward. (Bisnow, Oct. 27 and (ULI news release, Oct. 27)
- Byron Carlock, US real estate leader for PwC and a member of The Real Estate Roundtable, told REjournals this week that challenges facing CRE include rising interest rates, return-to-the-office issues, and the possibility of converting office space to alternative uses. (Interview with Midwest Real Estate News, Nov. 2)
- Carlock said, “The downtown buildings with large floor plates built from the ‘60s to the ‘80s might need a change. That’s significant because about 80% of our office stock was built in the ‘80s or before. We will see a great change in which office space is relevant and which is not.” (Roundtable Weekly, Oct 12—“Real Estate Industry Urges Lawmakers to Consider Tax Incentive for Property Conversions”)
- Roundtable President and CEO Jeffrey DeBoer this week discussed the industry’s public policy agenda on the verge of the midterm elections during the American and Development Association’s Fall 2022 Conference in Washington. [Photo, left to right: ARDA President and CEO Jason Gamel, Former Congressman (R-PA) and Chair of the House Transportation Committee Bill Shuster, Jeffrey DeBoer, and U.S. Travel Association President and CEO Geoff Freeman.]
The Roundtable plans to release its Q4 Economic Sentiment Index report next week. The quarterly index provides a gauge of CRE leaders' views about the overall health of property markets, debt and capital availability, pricing, and asset values.
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