US CRE Market Insights March 2023

US CRE Market Insights March 2023

The timing of our quarterly updates on US commercial real estate (CRE) coincides with the release of quarterly total returns for the NCREIF National Property Index and its detail for property sectors and metro areas. This report reflects NCREIF results for the fourth quarter of 2022 and the macroeconomic data associated with that time period.  We also offer into more recent data that might foreshadow US CRE performance in more recent months.


Economic developments unfolding over the first few weeks of 2023 offer some hope that a 2023 soft landing for the US macroeconomy is at least possible. Moderating inflation and a muted February fed funds increase of 25 bps contribute in a major way to this hope. Higher interest rates are permeating through the economy as seen most vividly in the collapse of existing home sales, new home sales, and electronics & appliances purchases. But, at the same time consumers are boosting their spending on restaurants which contributed importantly to the strong job increase in January.1 Can consumers keep their spending going through 2023?  For US CRE the lagged response of fundamentals to the shift in the interest rate environment is underway and will play out over the remainder of the year. Sector and geographic responses vary making diversification ever more valuable for investors.  


1US Bureau of Labor Statistics, Employment Situation. February 3, 2023.

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