America‘s Commercial Real Estate Show
Commercial Real Estate Market Forecast 2025 with Ryan Severino
Jan 21, 2025
Ryan Severino, Chief Economist at BGO, joins the discussion to unveil insights on the commercial real estate landscape for 2025. He tackles the complexities of mortgage rates versus treasury yields, shedding light on economic policies impacting the sector. Tariffs and trade policies are explored for their influence on office spaces. Severino also delves into the implications of AI on energy demands in real estate, highlighting new investment opportunities amid market challenges. A must-listen for anyone interested in future trends!
45:01
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Quick takeaways
- The commercial real estate market faces uncertainty due to rising treasury yields and inflation, complicating investment decisions for 2025 and beyond.
- Emerging opportunities in segments like multifamily housing and data centers contrast with negative perceptions of retail and office spaces, indicating potential growth.
Deep dives
Current Trends in Treasury Rates and Inflation
Recent fluctuations in the 10-year treasury rates have raised concerns in the commercial real estate market, particularly as the Federal Reserve has cut rates but treasury yields have continued to rise. This paradox suggests that the bond market is reacting negatively to perceived inflationary policies and ambiguity in the Fed's forward guidance. The mathematics of the current yield doesn't align with prevailing inflation, indicating that the market might be overreacting to the Fed's actions. Experts believe that while there are risks of poor policy decisions, the treasury market's reaction seems to reflect an excessive sense of doom regarding the economic outlook.
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