Source: RE Journals —
Falling values? Fewer transactions? A slowdown in new construction starts? These are all likely in the commercial real estate sector in 2023, according to Anthony Graziano, chief executive officer of Integra Realty Resources, a Denver, Colorado-based commercial research and consulting firm with offices across the country.
Integra recently released its Viewpoint 2023 report, an in-depth look at what it expects to see in commercial real estate this year. The takeaway? Expect a year of change, with commercial real estate values normalizing.
In other words, expect CRE values to fall this year from the peaks they hit in 2021 and 2022.
Graziano shared his thoughts on the U.S. commercial real estate market and its future with Midwest Real Estate News. Here is some of what he had to say:
Integra Realty Resources cites Amazon’s decision to pull back on the number of new warehouses it is building. Is this a sign that the industrial market might have finally hit a peak?
Anthony Graziano: I don’t know that we can call it a peak yet. The fundamentals are still good for the long term. But in terms of value and pricing, we have probably seen industrial’s peak. I don’t think we’ll see industrial values keep rising this year. There is still a large speculative supply out there. Then there’s the pullback from Amazon. I think that is giving investors pause.
We do expect industrial demand to begin to slow down this year. That will put pressure on pricing in 2023. The costs of construction are up. Interest rates are up. As we are heading into a recessionary climate, we will see pullbacks in spending. That will have an impact on the industrial market.
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