CrowdStreet, Inc. (“CrowdStreet”), an award-winning1 online real estate investing platform, released its Mid-Year 2023 Commercial Real Estate Outlook & Opportunities report published by CrowdStreet Advisors2.
Authored by CrowdStreet Advisors’ CIO Ian Formigle, the report features trends and data on multiple commercial real estate (“CRE”) asset classes to help individuals, financial advisors, and sponsors gain insight on investment opportunities. It finds that the CRE industry is facing a period of mispriced opportunities.
As inflation and rapidly rising interest rates have shifted property values and perceptions of future demand, risk assumptions are also changing accordingly. The spectrum of commercial real estate asset classes covered in the report includes multifamily, industrial, hospitality, office, retail, self-storage, student housing, and life sciences.
“Swings in the market are inevitable, but the events of the past few years have required many to drastically shift their strategy in order to navigate a massive sea change we’ve experienced in the investing and lending landscape,” Formigle says.
Formigle and the Office of the CIO recently joined CrowdStreet Advisors. He and his team lead CrowdStreet Advisors’ investment strategy for its funds, as well as serving as a fiduciary for the firm’s private management account (PMA) investors.
The Commercial Real Estate Outlook & Opportunities report offers insight into the impact of more than a year of tightening monetary policy, a resulting higher cost of debt, and significantly decreased liquidity. The current economic environment has impacted deal pricing, given that deal underwriting is based on a significantly higher cost to acquire debt, build new projects, and maintain existing ones.
As CRE values begin to shift, liquidity in the market has dried up, allowing certain investors to exploit mispriced opportunities, especially those marked at discounts to their recent peak.
Formigle adds: “Uncertainty has taken center stage, and no one can confidently predict when or if the economy will adjust to the ‘new normal’. The greater the level of uncertainty, the more buyers tend to use it as leverage when negotiating transactions. Investors and sponsors who remain nimble and diligent in their decision-making right now can position themselves for long-term profitability and success.”
To review the full report and each individual asset class’s outlook and opportunity, please visit here.
About CrowdStreet
CrowdStreet, the nation’s largest online private real estate investing platform*, provides investors direct access to a range of investment opportunities, offering the ability to invest with ease and convenience. Real estate firms benefit from a highly efficient way to connect with investors to raise capital and manage investor relations. CrowdStreet is creating a community where investors and experienced real estate firms can work together to expand participation in the commercial real estate market to build and preserve wealth. Learn more at https://www.crowdstreet.com/.
This communication is for informational purposes only and should not be regarded as a recommendation, an offer to sell securities, or a solicitation of an offer to buy any investment products, financial products, or services. Investment opportunities available through CrowdStreet are speculative and involve substantial risk. You should not invest unless you can sustain the risk of loss of capital, including the risk of total loss of capital. All investors should consider their individual factors in consultation with a professional advisor of their choosing when deciding if an investment is appropriate. Private placements are illiquid investments, in that they cannot be easily sold or exchanged for cash, and are intended for investors who do not need a liquid investment.
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1CrowdStreet was named Best Overall Real Estate Crowdfunding Site by Investopedia for 2021 and 2022. Investopedia chose the Best Real Estate Crowdfunding Sites by conducting an independent review process based on a variety of factors, including Investment minimums, Platform fees, Total number of investors, Total investor dividends, Historical annual returns, Reinvestment opportunities, Website transparency (how easy it is to find platform fees, minimums, and redemption options), Better Business Bureau ratings, and Educational offerings. They also investigate each company’s online reputation—including average monthly search volume, recent news, customer reviews, and complaints—to ensure the platform is well respected and legitimate. https://www.investopedia.com/review-process-4802351
2CrowdStreet Advisors, LLC (“CrowdStreet Advisors” or “CSA”) is a wholly-owned subsidiary of CrowdStreet and a federally registered investment adviser. Investment strategy for CSA is led by Ian Formigle as Chief Investment Officer (“CIO”) of the Office of the CIO (“OCIO”) of CSA. The Mid-Year 2023 Outlook and Opportunities report represents the views and strategies employed by the Office of the CIO.
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