PGIM Real Estate releases its quarterly insights report

As most real estate markets are in or heading for a downturn, all eyes are focused on the capital markets, according to PGIM Real Estate in its quarterly insights report for the third quarter.

Capital markets move first, which gets everyone thinking each downturn is the same. They’re not. Each downturn is unique. And that speaks to the opportunity sets that arise in times like these. Sure, it’s easy to say, “buy the fundamentals,” but which sectors? Over what period? At what price? This quarter, each region addresses these key questions.

If the United States enters a recession, rents in the recent outperformers will fall, particularly with swelling supply pipelines in many of these markets. By contrast, PGIM expects many of the laggard markets, such as Washington, D.C., and Boston, to be relative safe havens. Despite its history of steep rent declines in downturns, even San Francisco may prove less volatile given the lack of rent gains in recent years.

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