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Assessing Investor Sentiment: A Window Of Opportunity

Capital Markets Conversations

March 21, 2024 5 Minute Watch

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CBRE’s January 2024 U.S. Investor Intentions Survey showed that investors remain optimistic about the future, anticipating recovery despite short-term volatility. In this episode, Chris Ludeman, Global President of Capital Markets, provides a quarter-end update on investor sentiment.
Assessing Investor Sentiment: A Window Of Opportunity

Summary

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  • Recent Sentiment Change
    With sellers increasingly aware that they must meet the market to trade, investors and capital are actively looking to invest at value pricing. Core buyers, quiet in the last 18–24 months, are ready to come off the sidelines at core-plus pricing. Meanwhile, core-plus buyers are seeking value-add pricing, and value-add buyers are after deeper discounts.
  • Generational Buying Opportunities
    Office investment at current values may present generational buying opportunities. Expect more portfolio and entity-level transactions as well.
  • Incremental Increase in Activity Levels
    The Fed did not cut rates in March as some were anticipating. While CBRE still expects a cut in June, investors now believe interest rates may not fall as far or as fast as previously expected. Still, momentum should build incrementally through each quarter of 2024, especially toward yearend.
  • New Development Despite Oversupply
    CBRE research shows existing oversupply in industrial and multifamily will be absorbed in the near term, opening the way for rent growth in the next few years. Smart money is looking at land for development and working on entitlements to get ahead of this trend and deliver in 2026.
  • Window of Opportunity 
    The window of opportunity for deep value investing may not stay open for as long as some believe. Ludeman thinks that some investors may wish they had been more aggressive in 2024 and early 2025.

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