Connect Money and Connect CRE, along with ADISA, recently hosted a webinar, Sailing Through the Choppy Waters of Capital Raising, to discuss how experts are steering the ship through the current challenging commercial real estate environment. 

The market entered 2023 with an air of caution and uncertainty as stakeholders navigated a shifting market landscape that came about throughout much of the second half of 2022 as the abundance of cheap capital that investors were accustomed to for the past 15 years began to quickly evaporate.  

Now, as we prepare to end the first quarter of 2023, the market is suddenly confronted with a new tail risk – strains in the banking system. But banks aren’t the only source of stress. Pockets of the commercial real estate market, which is worth around $20 trillion, have shown cracks as well.  

Traditional transactions seem to be on the backburner and there’s limited visibility in pricing. The biggest deterrent to capital flows is uncertainty, and not knowing where rates will land has kept liquidity on the sidelines and prolonged the process of price discovery as buyers and sellers remain far apart on expectations.

It’s difficult to predict what will transpire next given that there are so many moving parts, including still elevated inflation, uncomfortably high interest rates, fears of a recession and financial instability.  

While our panel agreed that it’s been a challenging year thus far, the second half of 2023 will present opportunities and money is going to start coming back to work.

“I think real estate’s a tremendous asset to own in a portfolio today and we’ll probably get back to maybe a marginally higher new normal, but certainly closer to the old normal than the last two and a half years that we were in,” said Joe Hart, director of capital markets, RealSource Properties. 

In the Webinar, you’ll also hear from Kirby Noel, National Sales Manager and Managing Director at Nexpoint, and Colin Cosgrove, Executive Vice President, Head of Sales at Inland Securities Corporation.