Trepp Outlook ‘Cautiously Optimistic’ But Concerns Are Clear
For instance, more than half of respondents said policy and regulation would impact CRE negatively.
A stunning 90% of respondents recently surveyed by Trepp say they think economic occupancy for the office asset class will be less than pre-pandemic levels, a figure that sets the sector behind retail and hospitality.
Of that total, 44% of professionals surveyed in Trepp’s 2021 CRE Sentiment Survey also said economic occupancy—not to be confused with physical occupancy—for the office sector would be well below pandemic levels. And 90% also said economic rents would be lower than pre-COVID levels.
Around 80% of respondents said they predict retail effective rents and economic occupancy will be below pre-pandemic levels, while 70% say hotel effective rents will be in that same category.
More than half of respondents also said policy and regulation, including the federal eviction moratorium, would impact CRE negatively; just 7% said they thought policy would impact CRE in a positive way. Around two-thirds of respondents said tax policymaking will negatively impact the markets over the next six months and more than half of those surveyed said new tax measures were a major concern.
Overall, though, Trepp categorized respondents’ opinions on the general economic outlook as “partly sunny.” About 45% of respondents said they think national economic conditions will present a tailwind for their business by the end of the year, while 29% said the condition would provide a headwind. Most respondents saw conditions being helpful or improving, but many ited the near-term economic outlook as concerning.