As published in PREA Quarterly, Fall 2024
With softening fundamentals, a lingering public-private valuation problem, and muted property transaction activity, the U.S. commercial real estate market appears to be stuck in a period of stagnation. However, all is not lost. The current glide path of the U.S. economy holds the keys to unlocking the property market’s stifled potential. Executing the hat trick of an economic soft landing, a reunion of public and private real estate values, and a revival of property transaction activity can revitalize the CRE market. In this environment, REITs too are expected to benefit, maintaining their investment performance and acquisition advantages over their private market competitors.
Lacking an official definition, an economic soft landing is typically described as a time when the Federal Reserve’s monetary tightening policy has been successful in reducing inflation, as well as avoiding a surge in unemployment and negative economic growth.
To read the full story, visit PREA Quarterly (pdf).