Altus Group, a leading provider of asset and fund intelligence for commercial real estate, just released the results of its Q3 CRE Industry Conditions & Sentiment Survey, a quarterly survey that collects insights on current market conditions and future expectations.
The top takeaway from the Q3 results would be the CRE environment is still seen as largely challenging but there is increasing optimism. Of note, this quarter reflects the highest level of “intentions to transact,” and improved sentiment that properties are “priced about right.”
Key findings from this quarter for the U.S. commercial real estate market are:
- Capital sources: Capital availability expectations rose across all debt sources in Q3, most notably net expectations for capital from insurance companies is up 17 percentage points to 14% from Q2.
- Priority issues: Compared to Q2, the order of the highest priority issues remained unchanged except for a 16 percentage point decrease in concern for insurance costs, dropping this issue by two positions.
- Best performers: Multifamily property performance expectations rebounded sharply by 24 percentage points, with 69% now considering it among the “best performing” asset types.
- Transaction intent: A significant majority (89%) of respondents noted that they plan to transact (buy and/or sell) in the next 6 months, the highest level recorded by this survey series.
- Capital conditions: Survey respondents anticipate that the cost of capital and all-in rates will decline, while the availability of capital will increase over the new 12 months. Conviction varied across the changes.
Full survey findings are available here: https://www.altusgroup.com/featured-insights/us-cre-industry-conditions-and-sentiment-survey/
