Real estate investors are facing challenges as distress in Commercial Real Estate Collateralized Loan Obligations (CRE CLOs) hit a record 8.6% in April. The creation of new CLOs has dropped significantly in 2024 compared to 2022. Despite setbacks in Q1 2024, the office market shows resilience with positive net absorption in Q4 2023. Commercial real estate construction is experiencing a downturn across office, retail, and industrial sectors. Interest rates, suppressed valuations, and a slowdown in CRE investment sales are impacting the market, leading Brickell landlords to list properties at record prices. Commercial real estate transaction volume has declined by 37% in May 2024 compared to May 2023, and by 57% compared to May 2022, resulting in a 75% reduction in volume. Real estate debt funds are being monitored for their performance during the downturn, while challenges for the office market include overall demand due to remote work, obsolete inventory, and the debt environment.
What is the biggest headwind for the office market? 1⃣ Overall demand for office space (WFH) 2⃣ Obsolete inventory (Flight to Quality) 3⃣ The debt environment
How Real-Estate Debt Funds Have Fared in the Downturn - MSCI #realestate #finance https://t.co/c1arggAdCV
Real Capital Analytics just released May’s commercial real estate transaction volume report. Across all product types May ‘24 showed a -37% decline from May ‘23, and ‘23 was a -57% decline from May ‘22. Cumulative that is a -75% reduction in volume.
Amid elevated interest rates, suppressed valuations and a CRE investment sales slowdown, Brickell landlords are listing their office towers and development sites for record prices. Will these deals pan out? https://t.co/PRBpurIGI0
We're in the midst of a sharp downturn in commercial real estate construction Office 📉 Retail 📉 Industrial 📉 via @WellsFargo https://t.co/lfXTCyQoEp
Commercial RE crisis far from over https://t.co/QqxojIUdlr
The office market is showing promising signs of resilience amid varied company approaches to office usage. Q4 2023 saw a significant positive net absorption, and although Q1 2024 saw some setbacks, the overall outlook is hopeful. Download now: https://t.co/bav3DAY7C0 https://t.co/F84eFu6shO
Real estate investors are being wiped out in bets fueled by Wall Street loans, per Bloomberg. Distress in CRE CLOs reached a record 8.6% in April, according to data provider CRED iQ, and creation of new CLOs is roughly 90% lower so far this year than in 2022.