The US economy has proven surprisingly resilient during the recent rapid rate-hiking cycle. US real estate fundamentals are robust, with the notable exception of the office sector, whilst the escalating impact of climate change looms large across the real estate landscape.
Real estate capital markets are going through a period of adjustment as they adapt to an era of markedly higher interest rates. Indeed, the cost of capital and the low availability of debt were key drivers of the commercial real estate market in 2023. Investment activity has been muted while market participants wait for clarity on pricing, and gain confidence that the economy is strong and inflation under control.
