Key Takeaways
U.S. MACRO OUTLOOK UPDATE
EconomySlowing growth and a break in shelter inflation’s stickiness will pave the way for the Fed to pivot in the fall.
Capital marketsAcceptance of higher-for-longer is permeating the market, leading to more price discovery and more optimism around activity moving forward.
IndustrialEven with rent growth decelerating, strong fundamentals and an ongoing adjustment to higher rent levels among existing leases will keep this sector favored in an income-focused era.
MultifamilyThe supply wave gets the attention, but the strength of demand should be equally acknowledged, given that it is offsetting the impacts of development on vacancy, which is now nearing its peak.
OfficeStill challenged by the adjustment to hybrid work, the office sector at large remains soft. But not all markets or product are created equal: the market is trifurcated and becoming more so.
RetailThe lack of supply is the story here for a sector that has a 40-year low vacancy rate, hovering at 5.4%. Store openings will exceed store closings this year helping keep the market anchored at tight levels.
LodgingWhile pent-up demand for travel continues to buttress spending on lodging, cost effective and luxury options are likely to remain more insulated given inflation’s impact on middle- and lower-income households.
AlternativesSecular demand drivers continue to favor most alternatives, especially those with residential underpinnings and data centers.
