Why Credit Matters Most: Market Trends in Commercial Real Estate

The investment community is worried that the commercial real estate market, particularly certain subsectors such as office and retail, could come under stress as the pandemic pushed some workers away from urban centers and encouraged others to work from home. At the same time, the Federal Reserve’s efforts to tame inflation had led to significantly higher interest rates and accordingly higher borrowing costs. While those fears are reflected in publicly-traded REITs exposed to the sectors, little price discovery has occurred post pandemic due to a lack of transaction activity. Recent liquidity pressures at banks could force price discovery in the market, however, as borrowers facing near-term maturities on their loans might find that financing is no longer available as financial institutions seek to preserve cash.

Join us for a discussion on the outlook for the commercial real estate market, how the upcoming wave of refinancing could impact valuations, transaction activity, the value of investments in the sector and the credit quality of lenders, including large and small banks, in the space.