What’s your largest problem going into the second half of the yr?
In final month’s reader ballot, respondents recognized their largest anticipated challenges via the second half of 2023, and the way they might have modified because the begin of the yr. The listed challenges remained the identical, with solely slight adjustments on what respondents recognized as their high obstacles. The breakdown means that the present enterprise surroundings for industrial actual property stays roughly the identical, with adjustments towards views of a possible or ongoing recession, in addition to the identification of different, sector-specific challenges.
In an identical style to December 2022’s survey, 62 p.c of responders listed rates of interest and the supply of capital as their largest impediment towards enterprise, with many trade specialists perceiving a significant resumption of lending and gross sales transactions as occurring solely following months of market stability.
Regardless of the Federal Reserve pausing on price will increase final month, the general sentiments seem to solely be targeted on long-term market fundamentals, which might make buyers and lenders much less reluctant. At current, the emergence of a extra secure lending surroundings is months away on the earliest, and a doable resumption of rate of interest hikes on the Federal Reserve’s assembly this month would possibly additional alter sentiments.
READ ALSO: CRE Midyear Outlook: Cautiously Optimistic
Just like extant issues with rates of interest, 5 p.c of respondents listed inflationary pressures as their largest concern, the first motivator for the elevated rates of interest and market volatility. Conversely, 19 p.c of respondents listed a recession as their largest impediment to their companies, a 5 p.c lower from December’s 24 p.c. This seemingly owes to the truth that almost a 3rd of the trade believes that the nation is already in a single, based on a latest survey from RCLCO.
Lastly, provide chain points weren’t recognized as a major battle, in slight distinction with December’s 5 p.c of respondents. That, alongside a possible financial slowdown, translated to 14 p.c of responses itemizing different challenges, resembling low workplace occupancy charges and internet declines in property values as their high struggles, with the workplace sector being hit significantly onerous.
Click on right here to see CPE’s newest ballot, and the outcomes of earlier surveys.
