In A Nutshell
— U.S. real estate investment performance has stumbled in response to rising interest rates.
— However, property fundamentals are robust. While a mild recession might soften leasing momentum, we believe that markets will remain historically tight as construction slides.
— In our view, high interest rates will put further downward pressure on real estate values in 2023. This repricing, amid healthy underlying fundamentals, should create attractive investment opportunities.
— COVID aftershocks have temporarily cooled the industrial and apartment sectors and Sun Belt markets. Nevertheless, our conviction around these investment targets, rooted in longer-term forces, remains undimmed.