Examining the CRE Perception Gap
Perception Gap Emerging in the CRE Market
Economic Indicators Show Strength Despite Recession Risk
1Q GDP data shows a 1.1% annualized growth rate in 2023, in line with the Blue Chip consensus forecast of 1.2% this year
The U.S. economy also added more than 1 million jobs in the first 3 months of 2023, despite high-profile tech layoffs
KPI’s Are Strong for Most Asset Types
When compared to pre-pandemic averages, most property types are recording stronger fundamentals in 2023
Annual rent growth through 1Q exceeds the pre-pandemic average for all the major asset types besides office, with retail and industrial vacancy also lower in 1Q 2023
Office Presents Headwind, But Overall Outlook Bright
Office vacancy is up nearly 370 basis points from its 1Q 2019 level, with rent growth below the pre-pandemic average
The perception of a broad-based CRE reset being pushed by the media does not align with the current data, forming the perception gap in the market
*5-year period from 2015-2019; ADR growth for hotel
Sources: Marcus & Millichap Research Services, CoStar Group, Inc, RealPage, Inc.
