If you can't figure out the odds, you can't make the bet. I can't tell you how many times I have used that phrase in the past several years, as we have seen numerous market dislocations that have frozen deal activity. The pandemic, political events, capital markets anomalies, leaps in technology, tax law changes, and many other things have happened in the recent past that have given market participants reason to pause.  

2023 is different. A perfect storm of rapidly rising interest rates, economic uncertainty, changes in the way we use real estate, a fresh banking crisis and myriad other things have all occurred at the same time.  Assumptions that have been the baseline for decision-making have been totally blown up,  and the cost of capital has changed so rapidly that fundamental return parameters are still moving around. Too many factors are out of an investors' control and the market to buy and sell properties is essentially locked up.

 Most predictions as to when the markets return to normalcy focus on time frames far enough into the future that they are difficult to argue with. But it's not that simple. Even before the banking issues of last week, sales volumes are down across the board by as much as 50%, and we have been in what I call an "event-driven" transaction market. The vast majority of transactions in the first quarter of 2023, be they sales, recaps or refinancings, occur because something is forcing them to happen. This is not a new phenomenon and historically when markets freeze up, these event-driven deals provide data points that give investors the confidence to make decisions.  Every other time in my career where I have seen a market freeze, these types of deals are the key to getting things moving. But not this time.