Good news from Altus Group survey? CRE pros indicating that they are ready to buy and sell real estate again

In good news for the commercial real estate market, 80% of U.S.-based CRE professionals said in a recent survey that they expect to buy or sell property within the next six months.

That would be a boon to the commercial real estate industry, which is still waiting for owners and investors to begin buying and selling industrial facilities, office buildings and retail centers in higher numbers once again.

The positive news came from Altus Group‘s second quarter 2024 CRE Industry Conditions & Sentiment Survey released on June 12. The quarterly survey contains feedback from 560 commercial real estate professionals representing more than 97 firms in the United States and Canada. Altus Group surveyed these professionals from March 25 to April 29.

One of the bigger takeaways from this report is the willingness among respondents to make real estate deals. Commercial real estate sales have been slow since the Federal Reserve Board first began tweaking its benchmark interest rate. Now that the Fed has said it will no longer increase this rate, the hope is that investors and owners will begin selling and buying commercial real estate in larger numbers.

With 80% of U.S. survey respondents saying that they do plan to buy or sell in the next six months, it does look like the Fed’s decision to no longer increase its benchmark rate will spur more sales activity in the commercial real estate sector.

The survey found, too, that 91% of the largest firms said that they intend to transact during the next six months. That is up from 83% in the first quarter of 2024.

And what asset classes will investors buy? Four the fourth consecutive quarter, respondents told Altus Group that industrial and multifamily properties are expected to be the best performers during the next 12 months. U.S. respondents also said that retail is expected to be attractive, too.

Not surprisingly, respondents cited office as the expected worst performer during the next 12 months.

This willingness to make deals doesn’t mean that U.S. commercial real estate professionals aren’t worried about the country’s economy. The number of U.S. respondents who told Altus Group that a recession is “very likely” or “somewhat likely” in the next six months increased by 7 percentage points from the previous quarter.

This means that the majority of respondents — 70% — say that a recession is either “somewhat likely” or “somewhat unlikely” in the next six months. This indicates plenty of uncertainty.

In other results from Altus’ study, 49% of respondents said that they expect interest rates to remain stable during the next 12 months. Surprisingly, 25% of respondents said that they expected interest rates to rise during the next 12 months. That is up 16 percentage points when compared to the first quarter of this year.

Altus Group reported that 26% of respondents expected interest rates to fall by 20 percentage points in the next year.

More than a third of respondents — 37% — said that they expected increased availability of capital in the next year, a jump of nine percentage points from the last quarter. However, 40% of respondents said that they expected the cost of capital to increase in the next 12 months. That figure is up 12 percentage points from the first quarter of 2024.

And when it comes to revenue growth? Respondents to Altus Group’s survey were generally optimistic.

A total of 62% of survey participants said that they expected revenue growth to be stable during the next 12 months, while 19% expect revenue growth to increase. That latest figure represents a modest increase of two percentage points from the first quarter of the year.