Intro: Remote work is not common in Asia. Its still not common even during covid. We have inflation because of china. China held inflation down by providing cheap labor and product for the past 25 years in fact China was exporting deflation.
Most economist feel that we are post globalization. The world is now disconnecting and that increase inflationary pressure. Industrial market had eclipsed in price per foot.
Finance activoty is lower as Banks are trying to hold more reserves. lender areore selective and push away deals.
Borrower increased signings as rates came up. DSR changed for take out. Debt Yield is not a great place to look at deals at a raising interest rate.
Brent Wagner from Acore feels that in this environment he can still look at debt yeild. In his opinion, rents are also going up. He is doing less Multi and Industrial since the competition is too hard.
Chris Allman from CIM believes the most important is the sponsor abilities to solve problems and have a forward look. He is not doing much office. Worried about long terms Cap Rates on Multifamily and believes that caps will raise. Chris recommends to raise a lot of equity.
Jamie Zadera from PGIM lending in a lot of office conversations to life science. Howeber, she still worries about the quality and quantity of deals.
Josh Katzin from AECOM is seeing deals reproced however not hige repriced. But is it the beginning of something bigger? AECOM is very focus on ground up. The deals are going the opposite way: Construction is higher, and Rate is higher. Now we need rents to go higher…thats the big question. Investors want an inflation adjusted yield. Going in yeild is lower. Product need to be differentiated to attract top dollar rent across all product type.
Ash Baraghoush is worried aboit leverage. Buyers did not assume the rent growth enough. In theorty, we need to look at a cap rate growth of 50pbs. Lenders are sizing to a higher DSCR test. There is a pricing discovery mode in the next 6-12 months. The issues present opportunities on the back side. Short term turbulence are coming but good opportunities are coming on the other side.
Matthew Gorelik is believes developer will hold properties longer. High net-worth is tue driving force of real estate investments. Cash is scary. Pricing right and underwriting the exit debt is very important as the rates are going to be higher most likely
