Hard or Soft Landing? The Midyear Economic Outlook

CRE AND ECONOMIC OUTLOOK FOR 2H 2024​

Economic Soft Landing Remains Baseline Scenario​

• With inflation easing and other economic metrics sustaining slow growth, a soft-landing remains the most probably outlook​

• A recession is possible if the Fed holds rates too high for too long, but they signaled a willingness to cut rates this year​

If There Is A Recession…​

• The Fed would likely cut rates quickly and significantly​

• But CRE fundamentals would likely weaken as space demand for all property types would weaken​

Space Demand and Investor Confidence Could Both Spike​

• If the Fed begins its rate cutting cycle, it could reinvigorate confidence, causing companies to boost their expansion plans, resulting in increased CRE space demand​

• Increased certainty, lower financing costs and strengthening CRE fundamentals could boost CRE investor activity

*Forecast as of June 10​
Sources: Marcus & Millichap Research Services, Blue Chip​

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