A sense of clarity: A better understanding of asset valuations and a range of attractive opportunities are expected during the year ahead
2023 was “the year of questioning valuations,” says Joe Gorin, head of U.S. real estate equity at Barings. As investors, developers and consumers grappled with high interest rates and an uncertain economic picture, a remarkably low number of commercial real estate (CRE) transactions occurred in 2023, which resulted in “less transparency about what is the best value to put on an asset,” observes Gorin.
Investors expect the valuation opaqueness to begin to clear up in 2024 as the economic outlook solidifies, debt maturities lead to forced sales, transaction volumes pick up and asset valuations become more understood. With a working grasp of what assets are worth, investors and property owners will be better equipped to make acquisitions, sell assets, manage portfolios and negotiate their debt.
“What will likely result in 2024,” says Maggie Coleman, CIO, real estate equity, North America and global co-head of portfolio management at Manulife Investment Managem