Commercial Real Estate Market Report: Q1 2024

It is a new year and a new name for our signature commercial real estate market report, which we are rebranding as REcap. The report will continue to feature similar content as in the past, with an updated look and feel for 2024 and beyond that we hope you enjoy.

As the U.S. presidential campaign begins to ramp up and global political unease appears to be increasing, the U.S. economy seems more than resilient. Merger and acquisition (M&A) activity rebounded somewhat in the first quarter, and equity markets have continued their strong growth from the prior year while most await the assumed Fed reduction in rates later this year. There is a significant risk that markets are baking in too much optimism and could be set up for a significant correction if things do not go as hoped, but for now optimism for the future is evident.

Looking specifically at commercial real estate, the dynamics are a bit different as a challenging interest rate environment continues to weigh on markets. Debt concerns continue to be a primary theme in the first quarter of the year, most notably looming maturities. Several large transactions were also announced, with more prognosticators optimistic for more transaction volume in 2024 both at the property level and fueled by entity deals.

Key takeaways

• Multifamily housing: The multifamily sector has continued to outperform most of the real estate markets in terms of transaction volume as investors continue to execute deals despite capital markets and operational headwinds. Vacancies have continued their slow climb and will likely increase with new supply coming online in 2024, which are expected to be the highest amount in decades.