Credit: tampatra | envatoHyper-caution dominates the middle market RE space
Real estate leaders debate outlooks on the mid-market space amid ample capital availability contrasted with cautious sentiment
April 5, 2024Real Estate
Written by Helen Richards
After an extremely poor level of real estate transaction volumes in Q4 2023, the first weeks of 2024 saw optimism and confidence among market players for increased transaction volumes and a drop in interest rates sooner rather than later. By February, however, reality struck.
The recent GRI Middle Market Funds Club Meeting saw senior market executives partake in an intimate and honest discussion about the outlook for the middle market space. Participants discussed the reality that has emerged since the beginning of the year, as prior expectations for distress have not been fulfilled, and cautious sentiment continues to hinder transaction volume.
“There’s a difference between people that are saying we’re open for business, and people that are doing business.” Meeting participants agreed that there is a large amount of capital, but whether that capital is accessible is another matter.
Read the full GRI report with all takeaways from the meeting here.
“Something needs to give for the big guys to come back”.
Discussions suggested that for transaction volumes to return to normality, one of two things must happen:
The complete GRI report addresses this stalemate in more detail, as well as fundraising, development financing, student housing and co-living, and ESG.
After an extremely poor level of real estate transaction volumes in Q4 2023, the first weeks of 2024 saw optimism and confidence among market players for increased transaction volumes and a drop in interest rates sooner rather than later. By February, however, reality struck.
The recent GRI Middle Market Funds Club Meeting saw senior market executives partake in an intimate and honest discussion about the outlook for the middle market space. Participants discussed the reality that has emerged since the beginning of the year, as prior expectations for distress have not been fulfilled, and cautious sentiment continues to hinder transaction volume.
“There’s a difference between people that are saying we’re open for business, and people that are doing business.” Meeting participants agreed that there is a large amount of capital, but whether that capital is accessible is another matter.
Read the full GRI report with all takeaways from the meeting here.
The GRI Middle Market Funds Club Meeting was a unique opportunity for open and honest discussion among the market’s most senior players
(Credit: GRI Club)
(Credit: GRI Club)
“Something needs to give for the big guys to come back”.
Discussions suggested that for transaction volumes to return to normality, one of two things must happen:
- Lenders pull the plug: Lenders forcing foreclosure will prompt assets to enter the market, attracting opportunistic buyers and a restart of the market.
- Capital accepts the new norm: The market accepting current rates and pricing as the new norm, will see the ceiling adjust and a resurgence in market volume.
The complete GRI report addresses this stalemate in more detail, as well as fundraising, development financing, student housing and co-living, and ESG.
