Industry leaders remain optimistic about future market conditions even while acknowledging uncertainty stemming from interest rate increases, maturing office loans, financing costs, prolonged remote work policies and labor productivity, according to The Real Estate Roundtable’s Q3 2023 Sentiment Index. The index’s overall score of 46 rose five points from the second quarter, while the Current Index was up six points to 33 and the Future Index rose four points to 59. 

“Many maturing loans were financed when base rates were near zero and now need to be refinanced in a challenging environment where rates are much higher, values are lower and markets are less liquid,” said Jeffrey DeBoer, president and CEO of The Roundtable. “Higher rates are also contributing to cyclical pressure on valuations. On top of that, remote work has devastated America’s downtowns and stalled office demand.” 

He continued, “The economy has undergone significant transformations due to the pandemic. The realities and challenges we face today requires us to rethink how businesses and people use offices, retail, housing, medical care, and more. Future buildings must accommodate the changes to be successful. The Roundtable will continue to advocate and support measures that boost the availability of credit and enhance the formation of capital in the commercial real estate industry, particularly during these times of market uncertainty.” 

Data for the Q3 survey were gathered by Chicago-based Ferguson Partners on The Roundtable’s behalf in July.