Is a Weaker Economy Good News for CRE?

Written By Marc Nicholson

Should CRE Investors Be Celebrating?

  • Unemployment Rises To 4.3% in July

  • The BLS released data this month showing a 20-basis point rise in the unemployment rate to 4.3%

  • As a result, media outlets and investors began discussing the potential for an upcoming recession

  • Precision Alters Crucial Recession Indicator

  • The Sahm Indicator rose to recessionary levels on a rounded basis, sparking heightened uncertainty in the media

  • However; on an unrounded basis the Sahm Indicator sits at 49, suggesting we are not entering a recession entering August

  • Why This Could Be A Turning Point For CRE Investors

  • While cooling economic data is usually a bad sign for the economy, this time it could boost the outlook for investors

  • CRE Investors have near record levels of capital waiting to enter the market, and deal flow is poised to rise quickly if the Federal Reserve responds to economic softening swiftly

* Through July

Sources: Marcus & Millichap Research Services, BLS

Discussion Video:

Marc Nicholson
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