CRE industry conditions and sentiment survey - US Q2 2024 results
Gain insights into the market sentiment, conditions, metrics, and issues affecting the US commercial real estate industry based on our Q2 2024 survey.
Key findings
Recession concerns
While the majority (49%) of respondents do not anticipate a near-term recession, those saying that a recession in the next 6 months is likely increased by 7 percentage points from Q1.
Cap rate expectations
A broad majority (68%) of respondents noted moderate to significant increases in their expectations for going-in / current cap rates (68%) and reversion / exit cap rates (60%).
Capital expenditures
Expectations for capital expenditures have somewhat stabilized, with 49% indicating that their expectations have remained “about the same” relative to 12 months ago.
New fund-targeted IRRs
Targeted gross IRRs seen marketed for new funds and deals averaged 12.4% across all property types in Q2 2024, up 60 bps from the prior quarter.
Transaction intentions
Eighty percent of respondents anticipate transacting over the next 6 months, with 91% of the largest firms signaling intent to transact in the near term, up from 83% in Q1 2024.