Jim Costello

Jim Costello, chief economist for real assets at MSCI, discusses the intricate connections between regional banks and the struggling commercial real estate market. He highlights risks of defaults and refinancing challenges, drawing parallels to the 2008 financial crisis. The shift from traditional bank loans to more flexible funding sources is explored, alongside the impact of remote work on office occupancy. Costello emphasizes the need for strategic repositioning of properties and adaptive strategies in light of rising interest rates and regulatory hurdles.

Jim Costello, an experienced economist at MSCI, joins broker Michael Bull to dissect the commercial real estate landscape and the 2025 transaction forecasts. They delve into the rising transaction volumes, particularly noting a 9% increase leading into 2025. The discussion highlights the unique challenges of distressed properties, emphasizing the advantages of local developers. Additionally, they explore shifts in the office sector post-COVID and the evolving debt market, pointing out the emerging opportunities within the multifamily realm and underutilized areas.