Economic Uncertainty Remains High for Commercial Real Estate: JPMorgan Chase  

Originally published on May 24, 2023, by Michael Tucker for Mortgage Banker's Association.

Economic uncertainty remains high for commercial real estate through the rest of 2023, reported JPMorgan Chase & Co., New York.

“There are plenty of big questions, including the interest rate environment and the future of office space,” said JPMorgan Chase & Co. Head of Commercial Real Estate and Commercial Banking Al Brooks in the firm’s 2023 Midyear Commercial Real Estate Outlook. “But there are also positives: multifamily and industrial continue to perform well, and the industry may have underestimated the strength of neighborhood retail.”

Brooks noted the Fed raised interest rates 10 times between March 2022 and May 2023. “Rates have risen at the fastest pace in decades, and it’s taking investors time to adjust,” he said. “Many commercial real estate owners still pay rates lower than current levels, so refinancing activity has slowed. It’s unclear if rates will continue to rise or if the Fed will change course in the second half of the year. This leaves investors with a familiar feeling: uncertainty.”

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