Q1 January 2023 CRE
WELCOME TO Q1 2023. #CREin2023
With the ups and downs of 2022, many are wondering what 2023 will be like. Here, we'll discuss some of the top factors for your CRE investments.
REAL ESTATE: While some investment firms are considering conversions in the Office sector, Multifamily still has significant demand with a reported 3.5 million new market rate units needed by 2035. Occupancy should hold above 95% with low vacancy like the Industrial sector with it's national vacancy rate at an all-time low of 4%. Heading into 2023, it is expected that Hospitality will sustain it's improvements post-covid with moderate pull back because of market volatility similar to the Retail sector.
FINANCE: 2022 saw seven interest rate hikes and data shows that there has been pull back in new construction starts due to pricing and balance sheet reduction. After an uptick in delinquencies for commercial loans in the first quarter, the pace slowed in Q2 through Q3 with the overall rate now at 0.70%. At the start of 2023, originations for most sectors hovers around 50% of pre-pandemic levels with the office sector accounting for 37% of non-multifamily originations.
INSURANCE: Coverage has been high on the list of concerns after several years of steady price jumps in a hardening market with a dramatic effect on builders and risk policies. Year over year, data shows a 5% increase in price for commercial insurance and anticipation of further increases for property insurance. However, for 2023 indications show a possible decrease for support policies like D&O, WC and Cyber.
WHAT TO DO? More opportunities to purchase are expected to come available in 2023 with a reported $1 trillion in commercial loans coming due by 2025. CRED iQ® has reported that their database shows $162 billion in commercial mortgages that are scheduled to mature in 2023. As most markets have had varying degrees of response to the volatility of 2022, be sure to rely on up-to-date market data and consult with knowledgeable professionals that are eager to assist.
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HOW CAN WE HELP? Lance Realty Team is lead by Lance Cornell, P.A., Commercial Broker assisting clients with investment sales. Additionally, we arrange debt and equity as well as quote insurance for investment protection.
Real Estate | Finance | Insurance
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Lance@RealtyByLance.Com | 305.203.2070
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