According to Bloomberg, the landscape around values has been recently more clear, and therefore buyers are finally seeing more opportunities for deals after a period of increased uncertainty that almost paused the markets for much of last year.
According to Jones Lang LaSalle Inc the average number of offers per deal increased by 16% in November 2023 from the end of 2022. The international consulting firm estimates that more than $3 trillion in real estate worldwide has debt maturing by 2025 and up to $570 billion in new equity will be needed given the sharp decline in values.
Meanwhile as soon as some central banks have started to turn the corner signaling that the cycle of rapid interest rate hikes is reaching its end, investors have also gained a better picture for borrowing costs. And several deals in the real estate industry — including the sale of about $33 billion in commercial real estate debt by bankrupt Signature Bank — have also brought more transparency to values.
According to JLL the market still needs to see a longer period of stability in interest rates to fully "unlock" the capital. For their part, many owners will wait for prices to further stabilize or potentially start to rise before they start transacting.
Source: Bloomberg
