Research Reports

In this publication, we cover for the first time the European office markets beyond the usual prime segment of the market, to fully capture the polarisation between prime and secondary buildings which has accelerated with the increase in remote working.

For much of Q1 2024, views converged on anticipated interest rate cuts by H2 2024. Late March, however, brought new data which painted a story of economic resilience (especially in the U.S.) and lingering price pressures – the rhetoric has shifted for now, but noisy data will likely continue to contribute to volatility in futures and swap markets. Although the delay in rate cuts indicates a healthier-than-expected economy, elevated debt costs have hindered efficient market transactions, and these delays are a net negative for private real estate markets. Based on information available at the time of this report, it seems likely that Asia Pacific’s markets (excluding Japan and China) will lag the Fed on a pivot and begin a cutting cycle.

U.S. economic growth slowed sharply over the first three months of 2024, decelerating from more than 4% annualized growth recorded during the second half of 2023 to only 1.6% for the first quarter. Previously reliable business cycle indicators such as the Index of Leading Economic Indicators continue to signify additional slowing ahead with heightened probability of actual economic contraction (i.e., recession) over the next 12-24 months.

Food, one of life's basic necessities, relies on cold storage for its safe, efficient, and effective distribution to U.S. and global populations. The ability to safely deliver food and other temperature-sensitive products from the point of origin to final consumption is a hallmark of a modern and prospering economy; indeed, as José Andrés put forth, food is everything. In aggregate, the various entities and facilities that compose this distribution system are commonly known as the global cold chain, and this chain is widely regarded as a critical component of our economic infrastructure. As we will highlight in this paper, the global cold chain is perhaps one of the most under-invested and under-improved infrastructure sectors in the U.S. and across the globe.

With one quarter in the books, the narrative for the US commercial real estate (CRE) market remains largely unchanged. The economy continues to expand, supporting generally healthy space market fundamentals, which are maintaining their general trajectory, both overall and within each property type. But the capital markets remain largely stymied by relatively high interest rates. Consequently, many in the CRE market are growing increasingly frustrated with the Fed and monetary policy. Despite these challenges, the balance of risks still skews positive for CRE over the next 12-18 months. We remain broadly positive on the outlook and continue to foresee better overall performance for CRE over the balance of the year. But what does that look like and how can investors best position themselves for this future?

In our monthly Insights into Private Markets (IPM), we provide you with bite‑sized updates into private equity, private credit, real estate and infrastructure. This month we look at interest rate cuts and the real estate market, the US elections and the risk to clean energy, the steady private equity performance into the mid‑year and we provide a market update on the private credit industry.

As the commercial real estate landscape shifts, a significant window for investment is opening. With nearly $1.7 trillion of commercial real estate debt maturing between 2024-2026 and traditional lenders pulling back, a financing void is emerging. This void is particularly pronounced in the multifamily sector, where valuations have readjusted from their COVID-era highs yet demand for housing remains robust.

The life sciences industry and its real estate demand is growing, aided by demographics and scientific progress. Life sciences is a defensive and fast‑growing sector that requires real estate assets to meet its growing demand. Today, those assets are in short supply. This represents an attractive risk-adjusted investment opportunity for value‑add and core investors alike: real estate focused on meeting the increasing needs of this part of the economy.

After last week’s broader international perspective, we are doing something similar once again. This week we focus on central banking given some noteworthy events from last week. The world has finally arrived at the point where monetary policy is shifting as central banks begin to cut rates and ease monetary conditions. But key central banks are not moving at the same time or the same pace. What does that mean for their respective economies and commercial real estate (CRE) markets?

Real estate investment managers worldwide are grappling with the challenge of decarbonization and the translation of net zero commitments into tangible actions. As constructing and operating buildings currently contributes an estimated 42% of the world’s carbon emissions, the built environment’s role in climate mitigation is increasingly critical. This report discusses best practices for real estate assets to reduce both operational and embodied carbon – whole life carbon – to hold a market advantage today and into the future.