Outlook and Trends in Real Estate Investment and Finance

The recent Real Estate Women’s Forum 2023 delved into the latest outlook and trends in the real estate investment and finance market. The conference brought together top real estate professionals and industry thought leaders to share insights and best practices.

Among the group of industry leaders, there was general acknowledgment of the market slowdown and its effects on deal-making in a period of rising interest rates. The commercial real estate sector continues to prove challenging, while residential and industrial, including alternative spaces such as data centers and self-storage, have thus far weathered the worst of the economic storm.

The relationship between lenders and borrowers has also changed. What may have been a lender and borrower relationship in prior years has evolved into more of a partnership between mutually dependent parties. The panel also touched upon the emergence of commercial property-assessed clean energy (“CPACE”) lending as a potential solution to provide liquidity and reserve build-up for borrowers, something unseen prior to the downturn.

The seller-buyer relationship has also evolved. The softness of today’s market has led sellers to show more flexibility with potential buyers, allowing a wider berth and more time to assume that desired risk.

With hybrid work models still in place across multiple industries, tenant demand in the commercial space has waned. In contrast to that are the industries that are using amenity-rich workplaces to draw employees back, leading to greater tenant demands for space upgrades.

Environmental, social and governance (“ESG”) factors are becoming increasingly important in real estate investing. Despite the higher upfront cost, investors are seeking properties with high ESG performance, as these properties tend to have a lower risk profile and better long-term sustainability.

Ultimately, the current economic distress calls for constant position analysis, running cash flows through different scenarios and strengthening relationships with industry stakeholders through to rebound and recovery.

Overall, the conference was an informative experience that provided invaluable insights into the latest trends and changes in the real estate investment and finance market. All sessions pointed to the same truth - in the current rapidly changing market, the ability to adapt to new trends and pivot quickly is more important than ever.