May 2023 Market Update

May 2023 Market Update

Rising interest rates, low rent growth, and banking turmoil have dramatically slowed CRE investment volume. Commercial real estate investment decreased by 57% YOY in Q1. As a result, commercial prices have declined by 15% Year-over-Year as of May. Large players with cash on hand, however, have enjoyed the luxury of continuing to invest via all-cash transactions. Players of all sizes, meanwhile, continue to invest in select markets.

Multifamily continues to benefit from strong fundaments and a housing shortage, but is down from peak 2021 growth. Industrial Is past peak performance, but remains strong. Office demand remains low amidst ongoing headwinds. Other markets are experiencing a flight to quality as investors vie for Class A properties. Multifamily saw rent growth increase by 2.5% over one year, the lowest growth levels since early 2021. Office saw even lower growth at 0.9%, as demand remains low and vacancies reached new highs. Industrial rent growth continued to outperform, reaching 10.3%, while warehouses reached 11.7%. Retail saw 3.8% rent growth over the last 12 months. Rents from strip centers rose at 4.5%, the second highest pace within the retail sector, falling only behind neighborhood centers.

Please let us know if our commercial real estate brokerage services may benefit you or anyone you know. Please take a few minutes to fill out the broker opinion of value form on our website.

Post a Comment

Contact us & Get a Free Consultation