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CREFC Sentiment Survey Reveals Cautious Upward Trend
CREFC’s third-quarter 2023 Board of Governors (BOG) Sentiment Index survey, a barometer of market conditions and outlook as perceived by senior members in commercial real estate finance, suggests a cautious upward trend. The index stood at 82.7, marking a 5% increase from the Q2 Index of 78.5.
Although the overall sentiment towards CRE finance businesses improved, a sizable 58% still maintains a negative outlook. However, this is a decline from the 67% negative outlook recorded in the previous quarter.
Key findings include the following, according to CREFC:
- Economic Performance: While expectations for the U.S. economy in the next 12 months remain subdued, there is a notable reduction in respondents anticipating worsening conditions (44% in Q3 from 55% in Q2).
- Policy Impact: The sector anticipates increased negative effects from federal legislative and regulatory actions, with 56% expecting detrimental impacts compared to 49% in Q2.
- CRE Fundamentals: Optimism appears to be returning slowly, with an increase in those expecting improvement or no changes in fundamentals.
- Investor and Financing Demand: There is a growing optimism the market will experience both heightened investor demand for CRE/multifamily assets and borrower demand for CRE/multifamily loans/financing.
- Liquidity Expectations: A significant shift toward a positive or neutral stance on increased CRE liquidity in the capital markets.
- CMBS Capital Markets: A noticeable rise in positive sentiment regarding the impact of CMBS and CRE CLO demand/spreads.
For up-to-the-minute insights on the state of the market and what’s next in the current cycle, be sure to attend Connect Investment & Finance 2023 on Oct. 24 at the Hyatt Regency O’Hare in Rosemont, IL. Click here to register.
- ◦Financing
- ◦Economy
