Senior commercial real estate executives are concerned about office and retail fundamentals as market uncertainty continues to curtail investors' appetites for risk.

The Q3 2022 Real Estate Roundtable Sentiment Index registered an overall score of 44, a decline of seven points from the previous quarter's overall score and 34 points down year-over-year. One survey respondent called retail in particular "a big unknown," saying "we don't know which tenants are going to stay in a brick-and-mortar store. The internet and Covid-19 have just accelerated this uncertainty. There is not a lot of appetite for it."  Another investor said office was "nuanced," with COVID-19 accelerated disinterest into older or more vintage buildings.

Overall, respondents to the survey said they were cautious of rising interest rates, increased inflation, and supply chain disruptions, but are optimistic about the underlying fundamentals for commercial real estate. About 53% said general market conditions are somewhat worse than a year ago, while 23% said conditions were about the same. And 34% predict conditions will be somewhat worse in a year, while 26% say they'll be about the same.