Commercial Real Estate Market Report: Q2 2024

Heading into what is likely to be a tumultuous election season, the economy continues to show its resiliency with GDP growing at a 2.8% rate in the second quarter according to recently released data from the Commerce Department. Commercial real estate continues to face a mixture of headwinds and tailwinds. The multifamily and industrial sectors are dealing with oversupply and absorption issues in some MSAs, while the markets generally continue to look forward to some level of interest rate relief to escape unfavorable debt terms.  

Financial nimbleness has largely avoided an overabundance of distress and markets are displaying numerous signs of having bottomed out. If we have reached a bottom, the second half of 2024 should see increased investment and transaction activity related to commercial real estate and recovering valuations.  

As always, improved markets will look different across asset classes and geographies but the overall trend for the remainder of the year looks to be positive.

Key takeaways

• Multifamily housing: Multifamily owners and operators are dealing with a more difficult environment than in the recent past, however the level of transaction and development activity in this sector relative to others is proof that investors remain convicted about the long-term fundamentals of multifamily housing. We believe some investors see this as a good time to buy low, banking on a good price relative to where asset valuations will be in the coming years as fundamental supply and demand dynamics will continue to be favorable.