Source: Missoula Current —
(Sterling CRE) In 2023, Montana CRE investors, owners, tenants and developers are seeking answers after a volatile year.
As we look ahead, here are trends we predict will shape the commercial real estate market in Montana. Knowing what’s next can help guide smart decisions about your next Montana commercial real estate move in 2023.
- The ask-bid gap will begin to close as sellers become more realistic about pricing. Sellers with well-performing assets have been holding tight to 2021 pricing as the cost of capital continued to climb. As we get comfortable in our “new normal” Sellers will start to adjust to market expectations
- That may not happen until later in the year, as we don’t expect pricing to level out until the third quarter of 2023. This means that there will likely be a drop in the number of transactions completed in 2023
- Commercial real estate defaults may rise as short-term notes become due. Rising interest rates along with increasing labor costs, inflation, and other factors will cause some owner-occupier stress. Investment deals financed under record-low interest rates set to adjust will find some investors unable to hit their return targets
