The latest edition of the quarterly SitusAMC Valtrends research report, titled Tectonic Shifts, finds signs that commercial real estate currents are beginning to shift. It finds cap rate expansion leveling off, transaction volume showing nascent signs of activity and originations heating up despite a stubbornly high-interest-rate environment and rapidly changing economic policies.
SitusAMC finds that investors continue to show heightened interest in CRE due to its safe haven qualities, although the firm also sees a growing trend toward hesitancy to transact. Although investors have become keener on stocks as equities have soared over the past quarter, the preference for bonds and cash has waned.
“The CRE market is moving slowly, but there are also signs of momentum building under the surface,” said Jen Rasmussen, VP of SitusAMC Insights, who co-authored the report with Peter Muoio, head of SitusAMC Insights. “Our analysis shows that dry powder is greatly elevated relative to deal activity. Investors are sitting on cash, waiting for opportunities to place it.”
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