According to the World's Largest Commercial Real Estate Specialist, You Shouldn't Expect a Rebound This Year
Commercial real estate has been a hot topic this year. Investor concerns about the sector center around high interest rates and the cost of refinancing these properties, many of which are due in the next two years.
CBRE Group (NYSE: CBRE) is one company that knows the industry inside and out. It is the world's largest commercial real estate business, with nearly $149 billion in assets under management (AUM). It provides services that include leasing, property sales, appraisals, property management, and development.
Earlier this year, CBRE Group expected a rebound in commercial real estate activity in the second half of 2023. That view recently changed, however, which could affect the company and others in the industry. Here's what we learned.
Commercial real estate is highly sensitive to interest rates
Commercial real estate properties include office buildings, multifamily housing, warehouses, malls, hotels, and medical facilities. These properties can be a source of dependable returns and dividends, but rising interest rates pressure companies operating in the sector.