CRE Fundamentals, Drivers, and Trends

Line graph titled 'Labor Shortage Narrowing, But Significant Disconnect Still Present' showing job openings and unemployment over years 2015 to 2023. Blue line represents job openings, orange line represents unemployed. Notable spike in unemployment around 2020, decrease afterward, and a rising trend in job openings. Ending values: 9.6 million job openings, 3.9 million unemployed, and 5.7 million difference.

Where CRE Fundamentals Stand And What It Means For Investors?

Opportunity Exists In CRE, Even In Hard-Hit Sectors

  • Local market dynamics can outweigh strong macro trends; some markets have stable or improving office vacancy rates, despite broad-based headwinds

  • Opportunities in impacted CRE segments highlight the importance of looking beyond national trends

Retail and Industrial Outperforming as Sectors

  • The multi-tenant retail sector now has vacancy below the 1Q 2020 level in 24 major U.S. markets

  • Industrial properties are also recording lower vacancy in 40 of 48 tracked metros, spurred by 52 consecutive quarters of positive net absorption

Investors Should Look Beyond The Headlines

  • All property types have locations, segments, and asset types that have exceeded national performance trends

  • Opportunities exist in the market despite economic headwinds if investors stay alert and active

*From 1Q 2020 to 1Q 2023
Sources: Marcus & Millichap Research Services, CoStar Group , Inc., RealPage Inc

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