Odd Lots Where Stress Is Showing in the $20 Trillion Commercial Real Estate Market
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Mar 20, 2023 
Rich Hill, head of real estate strategy & research at Cohen & Steers, dives into the $20 trillion commercial real estate market. He discusses how higher interest rates and a slow return to pre-Covid office occupancy are causing significant stress. The conversation highlights various asset classes, illustrating stark differences in performance between urban centers and Sunbelt states. Rich explores the challenges of refinancing amidst economic pressures and the complexities of property valuations in this shifting landscape.
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CRE: Not a Monolith
- Commercial Real Estate (CRE) isn't monolithic; it comprises 15 diverse property types.
- These property types have different fundamental drivers, like multifamily vs. retail.
Location Matters in Office CRE
- Office spaces in different locations cater to different needs and usage patterns.
- Return-to-office rates vary significantly; New York City lags behind Sunbelt states.
REITs: Leading Indicator for CRE
- Publicly traded REITs act as leading indicators for private market valuations in CRE.
- REITs react faster to market changes, while private valuations lag due to appraisal processes.