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- The big question on many investors’ minds – “Is a bubble forming in CRE?”
- From a macro level, Retail, Urban Office and Suburban Office are clearly not in a bubble
- - Price growth has been moderate, and fundamentals have kept pace with price gains
- While Apartment values have climbed considerably, historically strong vacancy and rent growth support strong appreciation – Structural housing shortage also a strong tailwind
- Similarly, Self-Storage price gains are backed up by record property performance
- - Vacancy at all-time low and rent growth is strong
- - COVID helped quell overdevelopment risk, keeping supply and demand in balance over the short-term
- Even Industrial, where exuberance has been strongest, is likely not in bubble territory
- - Vacancy, rent growth and NOIs support the aggressive price appreciation
- - eCommerce and supply chain disruptions provide long-term tailwinds to the industry
- Investors should closely monitor the supply and demand outlook for the next 3 to 5 years
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