KEY TAKEAWAYS
ECONOMY
Slowing growth and a break in shelter inflation’s stickiness will pave the way for the Fed to pivot in the fall.
CAPITAL MARKETS
Acceptance of higher-for-longer is permeating the market, leading to more price discovery and more optimism around activity, moving forward.
INDUSTRIAL
Even with rent growth decelerating, strong fundamentals and ongoing adjustments to higher rent levels among existing leases will keep this sector favored in an income-focused era.
MULTIFAMILY
The supply wave gets the attention, but the strength of demand should be equally acknowledged, given that it is offsetting the impacts of development on vacancy, which is now nearing its peak.
OFFICE
Still challenged by the adjustment to hybrid work, the office sector at large remains soft. But not all markets or product are created equal; the market is trifurcated and becoming more so.
RETAIL
The lack of supply is the story here for a sector that has a 40-year low vacancy rate, hovering at 5.4%. Store openings will exceed store closings this year helping keep the market anchored at tight levels.
LODGING
While pent-up demand for travel continues to buttress spending on lodging, cost effective and luxury options are likely to remain more insulated given inflation’s impact on middle- and lower-income households.
ALTERNATIVES
Secular demand drivers continue to favor most alternatives, especially those with residential underpinnings and data centers.
