The US economy is "still strong" and will support commercial real estate space demand, though inflation will remain a multi-year headwind, forcing the Fed to tighten monetary policy. And though rising interest rates may restrain CRE transaction activity, it won't be on a broad basis, with effects most visible in the property types and markets with the most aggressive pricing run-up over the last few years.
That's according to Marcus & Millichap's John Chang, who says CRE will continue to see strong investor demand in the near term. He also says investors shouldn't expect a real estate bubble, not in housing or in commercial real estate more generally.
"There are too many long-term demand drivers at play for any of the sectors to face a significant correction," Chang says.
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