The current market environment is not great for commercial real estate sellers, nor is it much better for buyers. For those able to drive returns through execution, though, the multifamily and industrial sectors still are compelling because of secular demand drivers, solid fundamentals and limited new supply, according to a report titled, “Limited liquidity, attractive opportunity,” by Suzanne Mulvee, chief strategy officer with GID, which was published in the December issue of Institutional Real Estate Americas. “With the ultimate resolution to the Fed tightening cycle unknown, managers can design investment strategies to hedge the two outcomes,” says Mulvee. “Through active management, investors may be able to drive yield by employing specific operating strategies that boost NOI and lift the return profile beyond the core range…. This would generate a more generous risk premium and offset some of the negative impact of appraisal rates moving higher.
