1、REPORTCBRE RESEARCHFEBRUARY 20232023 U.S.Investor&Lender Intentions SurveysIntelligent Investment2CBRE RESEARCH 2023 CBRE,INC.Intelligent Investment2023 U.S.Investor&Lender Intentions Surveys|ReportCommercial real estate investors and lenders plan to significantly reduce their activity in 2023 due t

2、o rising interest rates,economic uncertainty and associated impacts on values.Thats the conclusion of two recent surveys by CBRE,which reveal that real estate debt and equity markets are reacting to current economic conditions in a complementary manner.Although capital deployment decision-makers ent

3、ered the year in a cautious mood,CBRE believes pessimism may have reached its nadir at the time the surveys were conducted in December 2022.Despite expectations for less buying and selling activity,both investors and lenders say they will largely maintain their capital allocations to the commercial

4、real estate sector this year,signaling that abundant capital will support increased investment activity as uncertainty abates later in the year.The multifamily and industrial sectors were the most preferred by investors and lenders surveyed by CBRE.They also indicated a strong preference for dynamic

5、 secondary markets,particularly in the Sun Belt.Executive Summary3CBRE RESEARCH 2023 CBRE,INC.Intelligent Investment2023 U.S.Investor&Lender Intentions Surveys|Report01 Buying&lending expectations02 Inflation&interest rate expectations 03 Preferred real estate sectors04 Preferred markets05 ESG consi

6、derations06 Lender insights07 Looking aheadContents471012141719Buying&lending expectations015CBRE RESEARCH 2023 CBRE,INC.Intelligent Investment2023 U.S.Investor&Lender Intentions Surveys|ReportCBREs 2023 U.S.Investor Intentions Survey reveals subdued sentiment among commercial real estate investors.

7、Nearly 60%of respondents expect to purchase less real estate in 2023,while only 15%expect to purchase more.Almost half of respondents expect to decrease purchasing by more than 10%.Investors are also hesitant to sell assets as market pricing falls.Sixty percent say they will either sell less or not

8、sell at all,while only 27%expect to sell the same amount as last year.Sentiment among lenders has soured as well.CBREs 2023 U.S.Lender Intentions Survey finds nearly 60%of respondents expect to decrease lending activity this year.However,just 10%plan to meaningfully reduce their allocation to real e

9、state,while 67%said they will either maintain or increase capital availability for the sector.CBRE expects that the slowdown in investment and lending activity in the first half of the year will lower total investment volume in 2023 by approximately 15%from 2022.However,as Federal Reserve policy and

10、 economic conditions become more predictable around midyear,we expect investment and lending activity to recover.FIGURE 1:Investors purchasing activity expectations in 2023Source:U.S.Investor Intentions Survey,CBRE Research,December 2022.FIGURE 2:Lenders origination activity expectations in 2023Sour

11、ce:U.S.Lender Intentions Survey,CBRE Research,December 2022.0%5%10%15%20%25%30%35%40%45%50%More than10%higherUp to 10%higherAbout thesameUp to 10%lowerMore than10%lowerNointentionto invest0%5%10%15%20%25%30%35%40%45%50%More than10%higherUp to 10%higherAbout thesameUp to 10%lowerMore than10%lower6CBR

12、E RESEARCH 2023 CBRE,INC.Intelligent Investment2023 U.S.Investor&Lender Intentions Surveys|ReportFIGURE 3:Investors selling activity expectations in 2023Source:U.S.Investor Intentions Survey,CBRE Research,December 2022.0%5%10%15%20%25%30%35%40%45%50%Sell MoreAbout the sameSell LessNo Intention to Se

13、llAs Federal Reserve policy and economic conditions become more predictable around midyear,we expect investment and lending activity to recover.Inflation&interest rate expectations 028CBRE RESEARCH 2023 CBRE,INC.Intelligent Investment2023 U.S.Investor&Lender Intentions Surveys|ReportThe key consider

14、ations for buying and lending expectations this year are when inflation will peak and where interest rates will end up.About 50%of investors believe inflation will peak in Q1 or Q2,while 35%believe it has already peaked.Along with high inflation,most investors expect higher borrowing costs.More than

15、 70%of surveyed investors believe the 10-year Treasury rate will exceed 3.75%at year-end 2023.Lenders have a similar outlook on inflation,with 48%of those surveyed believing it will peak in Q1 or Q2 and 33%believing it has already peaked.Lenders also expect higher borrowing costs,but to a lesser deg

16、ree than many investors.More than 50%of surveyed lenders believe the 10-year Treasury rate will exceed 3.75%by year-end,while 43%believe it will finish the year between 3.00%and 3.75%.Both investors and lenders highlighted rising interest rates as a key challenge for commercial real estate activity

17、in 2023.Uncertainty about the direction of interest rates will limit real estate investment activity,particularly in the first half of the year.Nevertheless,CBRE believes that inflation and borrowing costs will not be as high as many investors and lenders expect.We forecast that the 10-year Treasury

18、 rate and inflation(CPI)will end the year at 3.2%and 4.0%,respectively.FIGURE 4:Investors year-end 2023 10-year Treasury rate expectationsSource:U.S.Investor Intentions Survey,CBRE Research,December 2022.FIGURE 5:Lenders year-end 2023 10-year Treasury rate expectationsSource:U.S.Lender Intentions Su

19、rvey,CBRE Research,December 2022.0%1%5%24%47%24%1%Less than 1.50%1.50%to 2.25%2.25%to 3.00%3.00%to 3.75%3.75%to 4.50%4.50%to 5.25%5.25%or greater0%5%0%43%43%5%5%Less than 1.50%1.50%to 2.25%2.25%to 3.00%3.00%to 3.75%3.75%to 4.50%4.50%to 5.25%5.25%or greater9CBRE RESEARCH 2023 CBRE,INC.Intelligent Inv

20、estment2023 U.S.Investor&Lender Intentions Surveys|ReportFIGURE 6:Investors year-end 2023 inflation rate expectationsSource:U.S.Investor Intentions Survey,CBRE Research,December 2022.FIGURE 7:Lenders year-end 2023 inflation rate expectationsSource:U.S.Lender Intentions Survey,CBRE Research,December

21、2022.1%5%36%45%13%0.0%to 1.0%1.0%to 2.5%2.5%to 4.0%4.0%to 5.5%5.5%or greater0%5%33%57%5%0.0%to 1.0%1.0%to 2.5%2.5%to 4.0%4.0%to 5.5%5.5%or greaterPreferred real estate sectors0311CBRE RESEARCH 2023 CBRE,INC.Intelligent Investment2023 U.S.Investor&Lender Intentions Surveys|ReportMultifamily remained

22、the most sought-after property sector by investors and the second most by lenders.Apartments were the most popular multifamily subsector despite weakening fundamentals over recent quarters.Half of surveyed investors indicated they expect price discounts of between 10%and 30%for multifamily assets th

23、is year,while 34%said they expect discounts of less than 10%.Build-to-rent and affordable housing were selected as desirable alternatives in the sector.Industrial&logistics was the most favored sector by lenders and the second most by investors.Modern logistics facilities in major markets were the p

24、referred industrial subsector by investors.With continued strong industrial real estate fundamentals,the sector had the highest percentage of investors(14%)indicating that they would not expect price discounts.Investors named self-storage and data centers as their preferred alternatives in the secto

25、r.Investors and lenders appeared pessimistic about the office sector.Only 10%of investors and no lenders selected office as a preferred property type.Less office usage since the COVID pandemic has caused higher vacancy rates and weakened the sectors real estate fundamentals.More than half of investo

26、r respondents are expecting price discounts of 30%or more for Class A value-add office assets,while 25%are expecting discounts of more than 30%for stabilized Class A assets.While this is a difficult period for the office market,high-end Class A office assets are still performing relatively well.The

27、retail sector was most preferred by only 9%of surveyed investors and 16%of lenders.Grocery-anchored centers remained the most preferred retail subsector,while 78%said they would expect price discounts for shopping malls.FIGURE 8:Investors property type preferences in 2023 Source:U.S.Investor Intenti

28、ons Survey,CBRE Research,December 2022.FIGURE 9:Lenders property type preferences in 2023Source:U.S.Lender Intentions Survey,CBRE Research,December 2022.Hotels/resorts,12%Industrial and logistics,27%Office,10%Other,3%Multifamily,37%Retail,9%Industrial and logistics,41%Multifamily,39%Retail,16%Hotel/

29、resorts,4%Preferred markets0413CBRE RESEARCH 2023 CBRE,INC.Intelligent Investment2023 U.S.Investor&Lender Intentions Surveys|ReportBoth investors and lenders indicated a strong preference for fast-growing secondary markets,particularly in the Sun Belt,including Austin,Atlanta,Miami,Nashville,Charlot

30、te,San Diego and Raleigh.Many investors expect these markets to outperform in 2023.Other preferred markets include Los Angeles and Dallas/Ft.Worth.FIGURE 10:Investors and lenders most-preferred markets in 2023Source:U.S.Investor&Lenders Intentions Surveys,CBRE Research,December 2022.1Dallas/Ft.Worth

31、2Austin3Miami/South Florida4Los Angeles5Nashville6Atlanta7Charlotte8Phoenix9Boston10Raleigh-DurhamPhoenixBostonDallas/Ft.WorthAustinMiami/South FloridaMost Preferred InvestorMost Preferred LenderMost Preferred Both AtlantaCharlotteRaleigh-DurhamNashvilleLos Angeles1Miami/South Florida2Raleigh Durham

32、3Atlanta4NashvilleT.5 AustinCharlotteTampaT.8 Dallas/Ft.WorthLos AngelesNew York CitySan DiegoLenderInvestorSan DiegoNew York CityTampaESG considerations0515CBRE RESEARCH 2023 CBRE,INC.Intelligent Investment2023 U.S.Investor&Lender Intentions Surveys|ReportCBREs surveys gauged the extent to which cu

33、rrent market conditions are affecting the widespread adoption and implementation of environmental,social and governance(ESG)initiatives by commercial real estate investors and lenders.While three-quarters of surveyed lenders have adopted ESG criteria,44%of them indicated that the current economic en

34、vironment is impacting ESG implementation.On the investor side,ESG implementation varies by global region.In Europe,for example,only 4%of surveyed investors have not adopted ESG criteria vs.24%of U.S investors.One-third of European investors are willing to pay a premium of up to 20%(half of those wi

35、lling to pay more than 20%)for ESG-compliant assets vs.90%of U.S.investors who indicated they would pay a premium of no more than 5%for such assets.More than 80%of U.S.investors said the current geopolitical and macroeconomic climate will have no impact on ESG adoption.Just under half indicated that

36、 the current environment would impact the implementation of already adopted ESG criteria.FIGURE 11:Investor ESG adoption levels in 2023Source:U.S.Investor Intentions Survey,CBRE Research,December 2022.FIGURE 12:Lender ESG adoption levels in 2023Source:U.S.Lender Intentions Survey,CBRE Research,Decem

37、ber 2022.0%10%20%30%40%50%60%We willcontinue toadopt ESGcriteria in allour decisions.We hadpreviouslyadopted ESGcriteria but willreconsider thescope based onthe currentlandscape.We wereplanning onadopting ESGcriteria but thecurrentlandscape hasdelayed ourschedule.We are unlikelyto actively planand a

38、dopt ESGcriteria in thenear to mediumterm given thecurrent climate.0%10%20%30%40%50%60%We willcontinue toadopt ESGcriteria in allour decisions.We hadpreviouslyadopted ESGcriteria but willreconsider thescope based onthe currentlandscape.We wereplanning onadopting ESGcriteria but thecurrentlandscape h

39、asdelayed ourschedule.We are unlikelyto actively planand adopt ESGcriteria in thenear to mediumterm given thecurrent climate.16CBRE RESEARCH 2023 CBRE,INC.Intelligent Investment2023 U.S.Investor&Lender Intentions Surveys|ReportFIGURE 13:Premium that investors are willing to pay for ESG-compliant ass

40、ets Source:U.S.Investor Intentions Survey,CBRE Research,December 2022.0%10%20%30%40%50%60%No price premiumLess than 5%6%-10%11%+While three-quarters of surveyed lenders have adopted ESG criteria,44%of them indicated that the current economic environment was impacting ESG implementation.Lender insigh

41、ts0618CBRE RESEARCH 2023 CBRE,INC.Intelligent Investment2023 U.S.Investor&Lender Intentions Surveys|ReportAnticipating many of the same challenging conditions as investors at the start of 2023,91%of lenders plan to underwrite more conservatively(5%significantly more conservatively).Lenders appear sp

42、lit on whether spreads between loan interest rates and the 10-year Treasury yield will increase or decrease.Our survey also indicates that 57%of lenders anticipate originating more floating-rate loans vs.33%anticipating more fixed-rate loans.Nearly 60%prefer short-term loans of up to five years.Lend

43、ers also expect challenges with loan maturities in their portfolios;however,57%indicate these challenges will be immaterial,with almost one-quarter indicating no challenges.Just 19%of lenders expect material challenges.FIGURE 14:Expected changes to lender underwriting assumptions in 2023 Source:U.S.

44、Lender Intentions Survey,CBRE Research,December 2022.FIGURE 15:Main areas for which lenders say pro forma underwriting assumptions will change in 2023Source:U.S.Lender Intentions Survey,CBRE Research,December 2022.0%5%86%5%5%Significantly more aggressiveMore aggressiveMore conservativeSignificantly

45、more conservativeNo change24%20%17%13%9%9%5%1%1%1%Cap ratesExit strategiesDebt yieldOoccupancy/vacancyTaxesInsurancePayrollNoneRent grwothDebt-service coverage ratioLooking ahead0720CBRE RESEARCH 2023 CBRE,INC.Intelligent Investment2023 U.S.Investor&Lender Intentions Surveys|ReportCBREs 2023 investo

46、r and lender intentions surveys indicate that capital markets will remain active this year.CBRE expects that economic uncertainty will continue to weigh on investment and lending activity in the first half of 2023 before a recovery takes hold in the second half.Three primary drivers will aid this re

47、covery:As of February 2023,CBRE expects the federal funds rate to reach a range of at least 4.75%to 5%this year.However,recent evidence of economic resilience,despite rapid rate hikes,makes additional monetary tightening more likely,with the federal funds rate potentially reaching as high as 5.25%to

48、 5.5%.Markets will be able to better assess the trajectory of the U.S.economy by midyear.Assuming the Fed ends its rate-hiking cycle by midyear,borrowing costs should stabilize and even decrease as long-term rates begin to reflect slower economic activity.CBRE expects that investment and lending act

49、ivity will pick up in the second half of the year,but that full-year 2023 volumes will be 15%below those of 2022.FIGURE 16:CBRE Economic ForecastSource:CBRE Research,February 2023.202320242025-2028Fed Funds Rate(Q4)4.75%to 5.0%2.75%to 3.0%2.0%to 2.25%10-Year Treasury(Q4)3.2%2.9%3.1%GDP(Q4)-0.6%2.5%2

50、.7%CPI(Q4)4.0%2.7%2.3%Copyright 2023.All rights reserved.This report has been prepared in good faith,based on CBREs current anecdotal and evidence based views of the commercial real estate market.Although CBRE believes its views reflect market conditions on the date of this presentation,they are sub

51、ject tosignificant uncertainties and contingencies,many of which are beyond CBREs control.In addition,many of CBREs views are opinion and/or projections based on CBREs subjective analyses of current market circumstances.Other firms may have different opinions,projections and analyses,andactual marke

52、t conditionsin the future may cause CBREscurrent viewsto later be incorrect.CBREhasno obligation to update itsviewsherein ifitsopinions,projections,analysesor market circumstanceslater change.Nothing in this report should be construed as an indicator of the future performance of CBREs securities or

53、of the performance of any other companys securities.You should not purchase or sell securitiesof CBRE or any other companybased on the views herein.CBRE disclaims all liability forsecurities purchased or sold based on information herein,and by viewing this report,you waive all claims against CBRE as

54、 well as against CBREs affiliates,officers,directors,employees,agents,advisers and representatives arising out of the accuracy,completeness,adequacy or your use of theinformation herein.Chris LudemanGlobal President,Capital MKevin AussefGlobal Chief Operating Officer,Capital MRachel VinsonU.S.Presid

55、ent,Debt&Structured FBrian StoffersGlobal President,Debt&Structured FRichard Barkham,Ph.D.,MRICSGlobal Chief Economist&Head of Americas RHenry Chin,Ph.D.Global Head Of Investor Thought Leadership Head of Research,Asia PDarin MellottSenior Research DirectorCapital Markets RContactsCarsten RaaumAssociate Research DirectorCapital Markets RJaeyoung KimSenior Research AnalystCapital Markets R