More Investors Expect To Deploy Capital As Buyers, Sellers Get Closer On Pricing

Commercial real estate professionals reported less concern around industry and market fundamentals and increased willingness to invest compared to last year, according to a new survey.

According to Altus Group's latest CRE Industry Conditions & Sentiment Survey, 25% of CRE executives say their primary focus over the next six months will be deploying capital. Just 7% of surveyed executives said the same in Q4 2023.

And while price discovery continues to plague those in the market for deals, with 41% of those surveyed saying that all property types are "overpriced," fewer people feel that way compared to Q4 2023, when 63%  said prices were too high.

The largest discrepancies between buyer and seller expectations are in land, with 59% of respondents feeling land is overpriced. Office and multifamily are right behind, with 57% and 56%, respectively. Retail and hospitality properties are largely believed to be priced "about right," according to the survey.

The majority of survey respondents said they're sitting tight while market turbulence works its way out, with 42% saying they were managing existing assets and holding off on new investments. That's down from 57% in the prior quarter.

Interest rates are still the biggest concern for CRE, but 46% of those surveyed expect rates to decrease over the next 12 months. Just 8% think rates will go up, compared to 48% in the fourth quarter.

“The reported cost of debt financing seen in the market improved on the quarter, across different loan terms, rate types and collateral property types,” the report also found, with respondents reporting debt financing costs were down about 70 to 90 basis points quarter-over-quarter.

Atlus Group surveyed U.S. industry participants in late January and early February, with a total of 256 respondents representing at least 65 different CRE companies. All major property types were well represented among the respondents.

Continue reading this story with a free account

Log in or register
Sign up for more articles like this
Subscribe to Bisnow's National Newsletters
Related Stories

Why Hines Is Restarting Its Development Engine

After Departing Trump Admin, HUD's Former Philly Head Joins Local Planning Commission

How Integrated Infrastructure Can Help AI Data Centers Deploy Faster, Build Smarter

Nvidia Buys Stake In Data Center Power Company

Invesco Cuts Fees, Adds Incentives To Quell Fund Redemption Requests

Investors Anchor Big Capital Into Marinas, Betting On Shallow Supply

Developers Eyeing Dallas' 50-Mile Trails Loop For Uptown-Like Opportunities

NYC Office Investor Warns It Could Go Under As Defaults Pile Up

Pinewood Studios Pays Owners £100M Dividend And Completes £300M Refinancing

Nike Closes 15 Stores Amid Tumultuous Year

Large Commercial Real Estate Sales Up 30% Despite Economic Headwinds

Evergrande Founder Sentenced To Life, 56 Others Sent To Prison In China