Commercial RE Showing Signs of Recovery
Commercial real estate projects are picking up after trade talks, with growing investor optimism despite ongoing economic and interest rate concerns.
WASHINGTON — Commercial property owners are restarting projects that were paused during recent U.S. trade negotiation, but investors remain cautious.
Josh Zegen, co-founder of commercial property lender Madison Realty Capital, said, "There was a shock to the system, capital marketwise and liquidity-wise. There are transactions happening, deals are getting done, but it's a little more caution, a little more uncertainty."
In April, a Green Street measure of property prices was down 0.5%, but May's outlook started to improve. Blackstone Inc.'s Nadeem Meghji, global co-head of real estate, said there hasn't been any material disruption for deal volume and prices after tariffs.
"We continue to hold the view that we're in the early stages of a real estate recovery. The slope of the recovery may be impacted by economic growth, and clearly, we pay very close attention to the impacts of higher tariffs, but the foundations for the real estate recovery remain intact," Meghji added.
Recovery of the credit markets has increased investor optimism, but the market continues to face pressures from high interest rates, the concerns about the U.S. fiscal status and continued trade disputes.
Source: Bloomberg (06/05/25) Wong, Natalie
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