{"id":1004631019,"date":"2022-11-21T03:10:48","date_gmt":"2022-11-21T11:10:48","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004631019"},"modified":"2022-12-27T02:34:31","modified_gmt":"2022-12-27T10:34:31","slug":"the-2023-cre-outlook-ceos-weigh-in","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/the-2023-cre-outlook-ceos-weigh-in\/","title":{"rendered":"The 2023 CRE Outlook: CEOs Weigh In"},"content":{"rendered":"

The commercial real estate industry is bracing for a year of dramatic and unpredictable change. Economic uncertainty, global events and policy shifts could influence every sector. During a CPE<\/em> Voices webinar<\/a> moderated by CPE<\/em> Editorial Director Suzann Silverman on Nov. 17, five CEOs from leading investment, finance and advisory firms made the case for cautious optimism as well as for making adjustments in the face of retrenchment.<\/p>\n

Cooling trend<\/h2>\n

Nearly all the executives welcomed recent signs of slowing inflation, though it remains at a 40-year high, even in the face of repeated interest rate hikes<\/a>. Of note was how this affects the dealmaking landscape. Marcus & Millichap<\/strong> President & CEO Hessam Nadji welcomed the cooling trend as a \u201cstep in the right direction.\u201d Still, Nadji voiced his concern about the possible lag effects, particularly regarding the recent interest rate hikes. \u201cHow much damage have they done that is not visible yet?\u201d he asked.<\/p>\n

\"\"

Clockwise from left: CPE Editorial Director Suzann Silverman; Hessam Nadji, Marcus & Millichap; Jonathan Martin, AEW; John Gates, JLL; Camille Renshaw, B+E; Chuck Schreiber, KBS<\/p><\/div>\n

Other participants saw the public markets’ quick adjustment to inflation and rising interest rates as another positive development. As John Gates, CEO of Americas markets at JLL<\/strong>, observed, \u201cEveryone has realized that the increase in rates isn\u2019t temporary. \u2026 Assets will reprice in this higher-yield environment.\u201d<\/p>\n

Nadji agreed, cautioning against rosy speculation. \u201cI don\u2019t see a scenario in the near term where rates are being lowered again and there is another round of stimulus. \u2026 We need to come to terms with the fact that normalized rates are here to stay.\u201d<\/p>\n

\n

WATCH THE WEBINAR: <\/strong>Outlook 2023: Insights From CRE Thought Leaders<\/a><\/p>\n

\n

Nonetheless, the combination of unknowns is having a pronounced effect on dealmaking and leasing. Camille Renshaw, co-founder & CEO of B+E<\/strong> doesn\u2019t see the current interest rates as the peak. \u201cNone of us have crystal balls, and our clients don\u2019t, in terms of timing,\u201d she said.<\/p>\n

Jonathan Martin, CEO of AEW Capital Management\u2019s<\/strong> North America division, also attested to this trend, noting, \u201cAll of our clients are waiting for those adjustments to take place.\u201d<\/p>\n

Kicking the can<\/h2>\n\n\n

Given the opaque economic outlook, the office sector has taken something of a beating. Chuck Schreiber, chairman, & co-founder & president of KBS<\/strong>, reported that tenants are tending to postpone more consequential leasing decisions, despite those clients’ efforts to encourage employees to return to the office.<\/p>\n\n\n\n

\u201c(Some) have put off making decisions about their space for almost three years; consistently, they want employees back in the office,\u201d he said. Consequently, KBS is emphasizing the essentials. \u201cWhat we\u2019re focused on is that cash yield and delivering that yield to our investors,\u201d Schreiber added.<\/p>\n\n\n\n

<\/p>\n\n\n

\n

READ ALSO: <\/strong>What Rising Interest Rates Mean for Net Lease Investors<\/a><\/p>\n

\n\n\n

Nearly all the executives are adopting a wait-and-see approach. Renshaw is encouraging B+E’s net-lease investor clients to pause. \u201cIn the coming months, we need to sit with client after client and advise them on what is best. … If you have a situation where you have rent escalations, you should be slow to move.\u201d<\/p>\n\n\n\n

With harder times on the horizon, an additional priority is to further strengthen client relationships. Nadji detailed Marcus & Millichap\u2019s approach to investor service. \u201cWe invest so much in research and content as a way of helping clients navigate. … (It\u2019s) all about client outreach and contact.\u201d At the same time, he emphasized the importance of a defensive stance that requires \u201clooking at expenses and non-essential investments and prioritizing.\u201d Martin concurred. “It\u2019s about being proactive,” he said. “Look at capital structures, look at reserves and tackle issues early.\u201d <\/p>\n","protected":false},"excerpt":{"rendered":"

Next year could get bumpy fast. These leading executives shared their insights during this CPE Voices discussion. <\/p>\n","protected":false},"author":3012,"featured_media":1004561549,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[44033,21808,23891,21742,21797],"tags":[50647,33758,43739,32796,43841,34836],"class_list":["post-1004631019","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-executive-profiles","category-featured","category-national","category-latest","category-webinars","tag-keypredictions","tag-aew-capital-management","tag-be","tag-jll","tag-kbs","tag-marcus-millichap"],"acf":[],"yoast_head":"\nThe 2023 CRE Outlook: CEOs Weigh In - CPE<\/title>\n<meta name=\"description\" content=\"Leaders from across the commercial real estate industry discussed their insights and predictions in the year ahead.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/the-2023-cre-outlook-ceos-weigh-in\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The 2023 CRE Outlook: CEOs Weigh In\" \/>\n<meta property=\"og:description\" content=\"Leaders from across the commercial real estate industry discussed their insights and predictions in the year ahead.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/the-2023-cre-outlook-ceos-weigh-in\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2022-11-21T11:10:48+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-27T10:34:31+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2021\/12\/MarandaP_compass-photo_Pixabay_1280x853.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1280\" \/>\n\t<meta property=\"og:image:height\" content=\"853\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Gabriel Frank\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/the-2023-cre-outlook-ceos-weigh-in\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/the-2023-cre-outlook-ceos-weigh-in\/\",\"name\":\"The 2023 CRE Outlook: CEOs Weigh In - 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