Research Reports

In this final installment of our artificial intelligence (AI) and real estate series, we turn our attention to two additional, yet distinct, property sectors: hotels and offices. In our view, hotels are positioned to experience positive, although marginal, gains from AI, primarily through operational efficiencies. Offices, by contrast, face a more nuanced outlook: while AI adoption in the near term may disrupt demand, over the longer term, technological advances have historically supported stronger economic growth and increased demand for commercial space.

Chicago commercial real estate has underperformed over the last decade. The gross unlevered return across all property types averaged 3.8% versus a 5.8% U.S. average, and the underperformance continued during the 3Q 2022 – 3Q 2024 commercial real estate (CRE) downturn. We attribute most of the underperformance to rising Cook County property taxes, with slow population growth as a secondary factor. Today, Chicago apartment fundamentals are among the strongest in the country. Recent transaction pricing suggests the market has overreacted to underperformance. In our view, average cap rates are 35 basis points (bps) higher than justified by fundamentals, or at a 6% unlevered price discount.

With supply chain and distribution management challenges likely on the horizon, the cold storage sector is positioned for strong performance due to its niche characteristics that include the necessity of purpose, significant cost to develop new facilities, strategic locations, and cross-industry integration.

Government bond yields have been rising across the globe since early April’s surge in market volatility. We explore why the recent yield spike may be transitory and consider the current attractiveness of fixed income relative to other assets on a risk-adjusted basis.

An expected uptick in office-to-residential and other conversions could help accelerate the recovery of Europe's challenged office sector. Learn how shifting demand and evolving regulations are creating new opportunities for investors.

Curious how shifting economic conditions and policy uncertainty are shaping the U.S. real estate landscape? AEW's latest Q1 2025 Research Perspective uncovers surprising resilience – and emerging opportunities – across the commercial property market.

How are shifting market cycles and monetary policies impacting Asia Pacific real estate in 2025? AEW's latest APAC Research Perspective explores emerging opportunities across key sectors and markets, from repriced office to high-growth living assets.

Explore the evolving macroeconomic environment and the commercial real estate investment landscape with our real estate mid-year update. While 2025 has proven more challenging than initially anticipated, we believe real estate is in a better position than it was just a year ago and that we are on the cusp of a turning point. Debt markets are functioning, capital is flowing at an increasing rate, and bid ask spreads have narrowed, and while investors are cautious, they remain engaged. Fundamentals will be a primary driver of total returns versus the post-Global Financial Crisis financially engineered returns which were driven by historically low interest rates. We believe property and market selection are therefore paramount.