Hines publishes its real estate 2023 outlook report

Of all the turmoil that transpired in 2022, arguably the most significant for real estate was the Fed's abrupt about-face on interest rates. Ironically, everyone knew that zero interest rate policy could not remain the law of the land indefinitely, writes David Steinbach, Hines global CIO, in its 2023 outlook report.

The risk of rates increasing has certainly been on investors’ minds for years. The larger question is how did the market ride the wave of declining interest rates and cap rate compression by investing in projects that should not have been funded in the first place? While the interest rate environment gave way to a fixation on Beta to the neglect of the hard work of Alpha generation.

Lynch believes the real estate industry overall has learned the lessons from previous cycles. Consumer demand has changed, leading to the wrong type of product in the office and retail sectors, but we are unlikely to face significant over-supply of new product. We have a grea