Rising interest rates, continued supply chain disruptions, labor shortages and recession threats are putting investors in a gloomy mood, according to LightBox’s Fall 2022 Investor Sentiment Report. The report demonstrated a marked contrast to the more optimistic outlook that occurred in early 2022.
Key findings of the report include the following:
Nearly 70% of those surveyed said they were concerned or “bearish” about the CRE outlook for the remainder of 2022. Interestingly, only 58% indicated those same concerns for 2023.
80% of those questioned said that recent market changes are impacting hiring plans.
90% of participants expressed recession concerns; 34% said they were very concerned, while 56% indicated they were concerned.
Top threats to commercial real estate are rising interest rates, inflation and supply chain disruptions.
Construction materials availability and pricing continues to be unpredictable and challenging.
Labor shortages are also creating challenges throughout the development cycle.
While office vacancies remained a concern among many respondents, there was also cautious optimism. Specifically, large technology firms like Google are leasing space and creating high-amenity campuses in New York, Chicago, Austin, TX and other markets.
Another bright spot in the survey was that of industrial demand. Specifically, demand for industrial space continues outpacing supply. Furthermore, some industry experts indicated a “fairly robust level of industrial leasing and construction activity for the remainder of the year as large, sophisticated end users continue to build out their bulk warehouse space,” LightBox analysts commented.
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