In a Nutshell:

• U.S. real estate started the year on a strong footing. Fundamentals and prices stabilized as the economy gathered momentum. Investment performance returned to pre-COVID levels.
• We believe that the real estate outlook is bright, supported by a sharp economic recovery, disciplined supply, low real interest rates, and elevated inflation. In our view, the macro backdrop could hardly be more favorable for real estate.
• The picture is more complicated at the sector and market levels, where structural forces - including e-commerce, digitization, remote working, migration, and suburbanization - will drive divergent outcomes, in our view.
• We believe that warehouses, garden apartments, grocery-anchored retail centers, tech hubs and population magnets stand to benefit. Conversely, malls, urban apartments, and office buildings may struggle, particularly in more demographically stagnant locations.

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