CRE Fundamentals Start to Slow as Prospects for Economic Growth Dim
Source: Economics Group of Wells Fargo Bank, N.A.
- We now expect real GDP growth to dip into negative territory next year, although strong household and corporate balance sheets might help limit the magnitude and length of the contraction. Even a mild recession, however, raises the risk for a pronounced, prolonged, and widespread decline in economic activity. A recession would slow demand for office, industrial and retail space, pushing vacancies higher and slowing rent growth.
- Against a backdrop of intensifying inflation, rising interest rates and increased economic uncertainty, CRE activity already looks to be moderating. Property transaction volumes and price appreciation have both moderated from their earlier torrid pace.