Commercial real estate in 2023 was heavily impacted by high interest rates, ongoing inflation, and recession threats. However, the outlook for 2024 may be different. In their report “10 Critical Questions for 2024,” Cushman & Wakefield analysts address potential concerns and provide forecasts for the coming year.
One of the key questions is when will the Federal Reserve pivot? According to analysts, if there is sustainable downward movement towards the Fed’s target inflation rate of 2%, they forecast a change in stance in Q2 of 2024. This prediction comes with a caveat that personal consumption expenditures must also improve.
Another question addressed is whether there will be an avalanche of distressed assets. The answer is no – while distress levels are expected to continue increasing and lower-quality office assets remain under pressure, it’s worth noting that net operating income has significantly increased over expiring loans within the next three years.
The possibility of a recession in 2024 was also discussed by analysts who forecasted a downturn in Q1 with readers advised to watch out for changes in yield curve inversion as an indicator. Capital markets turning around depends on whether or not there is a Fed pivot according to Cushman & Wakefield experts who believe this could happen sometime during H2 due to continued weakness within office sectors but early signs show potential improvement within multifamily and construction industries.
In conclusion, while commercial real estate faced challenges from various factors such as high interest rates and inflation threats last year (in reference), it remains uncertain how these issues will impact CRE moving forward into next year (or “in future years”). However based on analysis provided by industry experts at Cushman & Wakefield (“according” or “as stated”), we can expect some improvements throughout various asset types including multifamily housing which shows promise despite current market conditions (“despite current market conditions” should come before mention/analysis about multifamily).
