Goldman recently released its mid-year outlook, which included a brief (but dense) real estate outlook. Let's unpack it:
"Positive signs for CRE"
[Go on...]
"After a challenging few years..."
[That's putting it mildly.]
"...underlying fundamentals in many commercial real estate (CRE) sectors exhibit positive trends. The outlook for existing assets is improving as construction levels decline from recent highs."
[There's only one way for supply to go for multifamily and industrial.]
"Moreover, positive signals within real estate today stem from long-term secular trends such as demographic shifts, technological innovation, and a focus on sustainability."
[Demographics: short-term positive but long-term much less positive. Technological innovation: is this good for real estate?
Sustainability: similar question.]
"A healthier valuation environment is anticipated to mitigate further downside risk and stimulate transaction activity from its currently subdued levels; a rebound in transactions would aid in establishing 'fair value.'"
[Healthy from what perspective? Sounds like pain to come.]
"While the adjustment process may be challenging for some assets, it is viewed as a necessary step towards broader market recovery and increased confidence in the asset class."
[Confirmed. Sounds like pain.]
"Current conditions potentially offer opportunities to acquire select assets at attractive prices..."
[Big differences between winners and losers.]
"...and enhance net operating income through proactive management and accretive capital programs, alongside the scope to develop, redevelop, or reposition assets to meet evolving spatial demands."
[Skills > knowledge.]
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