Which markets are outperforming for each property type? How local trends can run counter to the national norm Insights on 6 major commercial real estate property types

Inflation descending at a more subdued pace. Annual growth in the headline consumer price index (CPI) slowed to 4.9 percent in April, marking the 10th month in a row that this metric has decelerated since the Federal Reserve began tightening policy in the current cycle. Increases in the cost of borrowing have chipped away at household demand for major purchases, including for homes and new vehicles, which are often financed. The price index for shelter increased… Read More

Consumption tailwinds back demand for available space. Labor market resiliency, wage growth and easing inflationary pressures aided consumers’ spending power in April, supporting a 0.6 percent increase in core retail sales. Households concentrated their spending on essential goods and seasonal items during the month, generating sales growth across the…

Labor market continued to grow in April. Employers created 253,000 positions in April, up from the 165,000 jobs added in March but below the year-to-date monthly average of 285,000. Hiring last month spanned most sectors, ranging from technical health care and professional services roles to hourly restaurant positions. April’s employment growth, paired with a reduction in the labor force, was enough to dip the unemployment rate back down to a historical low of 3.4 percent. Unemployment… Read More

Why the Fed is having problems with wage growth Three forces sustaining the labor shortage How the labor shortage is affecting the CRE market

Federal funds rate pushed to 16-year high. On May 3, the Federal Open Market Committee lifted the overnight lending rate to a lower bound of 5.0 percent, a 25-basis-point shift. The FOMC has raised the federal funds rate a combined 75 basis points so far in 2023, just one-sixth of last year’s total shift. Going forward, the path is more open. Chairman Powell stated that the FOMC will take a meeting-by-meeting approach to any further monetary… Read More

Local apartment demand resisting broader headwinds. The New York City multifamily sector entered 2023 on strong footing. Nearly as many apartments were absorbed on a net basis last year as were constructed, which stands in sharp contrast to the national trend of increasing vacancy. Overall, roughly 70,000 more apartments are occupied today in the metro than before the pandemic began, as pent-up demand to form households offset an overall retreat in the local population. Moving… Read More

The Fed announced a 0.25% increase in the Federal Funds rate at the FOMC meeting on May 3rd, pushing the Target Rate to 5.00% – 5.25%. The move was widely expected by the market as inflation has been moving in the right direction, hitting 5.0% in March compared to 6.0% in April and down f rom 9.0% at its peak in June 2022. In its announcement, the Fed softened its…

How the Federal Reserve’s rate increase could affect CRE investments Has the Fed put more banks at risk? Implications for CRE lending What comes next for the Fed – will they pause the rate increases?

Home sales fall again as interest rates tick back up. After climbing to a five-month high during February, the pace of home sales regressed in March as the latest Federal Reserve rate hike helped push borrowing costs upward. The average 30-year fixed-rate mortgage had settled to 6.3 percent across the opening two months of 2023, prompting more prospective homebuyers to pursue listings. However, the mean borrowing rate ticked back above…