Fall 2022 Real Estate Outlook

Fall 2022 Real Estate Outlook

Download PDF
William Pattison Michael Steinberg Derek Tong Jacob Kurosaki Kiel Deitrich
SEP 27, 2022

We recommend

Commercial Mortgage Lending

Office Update | How far it’s come and where it’s headed

Explore Strategies

Real Estate

Key Takeaways:

  • Inflation remains high, interest rates are rising, and geopolitical risks have worsened, but consumers are well positioned, and job growth is strong.
  • We estimate discount rates across property types rose by around 50 basis points (bps) between May and September of 2022. Taken alone, this change in discount rates would imply a roughly 10% decline in real estate prices compared to just a few months ago; however, there are several mitigating factors that point to a milder impact on prices.
  • Few cracks are evident in the apartment, industrial, and hotel sectors.
  • We believe retail offers tactical pricing opportunities and a brightening fundamentals outlook.
  • The office sector remains challenged, but painting office with a broad brush could lead to both elevated risks and missed opportunities.