After many years of growth in a low–interest rate environment, the recent commercial real estate downturn can arguably be described as something of a shock to the system for many, writes Ben Thatcher.
Triggered by rapidly rising interest rates and an unstable geopolitical environment, it has probably been one of the gloomiest outlooks for real estate since the global financial crisis (GFC) brought things to a halt in 2008. But has the danger now passed? And if so, is it now time to re-enter the European market?
While the “wait and see” position that many have adopted over the past two years is an understandable response to the magnitude of the recent real estate market downturn, there comes a point in the cycle when waiting for the absolute minimum capital value is of only marginal benefit.
Furthermore, sitting on the sidelines may now have a negative outcome for some investors. According to Barings’ analysis of the European real estate market, it appear
