Insights from Altus Group's Q4 2024 CRE Sentiment Survey
NEW YORK and TORONTO — Altus Group (TSX: AIF), a key player in asset and fund intelligence in the commercial real estate (CRE) sector, has recently unveiled the results from its Q4 2024 CRE Industry Conditions & Sentiment Survey. This survey serves as a critical tool for gathering insights into the current market landscape and future expectations, drawing responses from an impressive pool of 390 seasoned CRE professionals across more than 129 firms in North America.
Key Findings of the Q4 2024 Survey
The latest survey provides crucial perspectives on a range of themes affecting the CRE market, reflecting the evolving sentiments among industry experts. Here are the highlights:
Operating Environment Expectations
Respondents remain cautiously optimistic about the near-term operating conditions, with 69% in the U.S. and 63% in Canada perceiving the environment as “somewhat challenging.” This sentiment mirrors the perspectives seen throughout 2024.
Focus Areas in the CRE Sector
Managing existing portfolios continues to take precedence for most professionals over the next six months, with an emphasis on deploying capital effectively. Such strategies indicate a proactive approach in navigating the current landscape.
Transaction Intentions
The intent to engage in transactions is strong, with a significant majority expressing willingness to transact within the upcoming months. Notably, 90% of U.S. respondents and 77% from Canada conveyed plans to engage in market transactions, showcasing a rise in confidence compared to previous surveys.
Pricing Perceptions Across Property Sectors
Participants in the U.S. increasingly view pricing as “priced about right,” indicating stability in the market. In contrast, Canadian respondents still largely find the market overpriced, although there are signs of improvement for specific property types.
Performance Expectations for Property Types
Among the various asset classes, multifamily and industrial sectors remain highly regarded, while data centers are emerging as a dominant focus in the U.S. Unfortunately, the outlook for office spaces continues to be less favorable, reflecting broader challenges in that market segment.
Priority Issues in the Coming Year
The cost of capital remains a top concern among survey participants, primarily influenced by prevailing interest rates. This highlights the critical balancing act investors and professionals must navigate as they plan for the year ahead.
Market Sentiment and Future Implications
Omar Eltorai, Director of Research at Altus Group, remarked on the survey outcomes, echoing the growing optimism resonant in the current capital markets. Factors such as decreasing interest rates and an improving bid-ask gap indicate that a recovery in transactions is on the horizon. However, he points out that it may take time for these sentiments to manifest into actual market activities.
“The Q4 findings closely track the prevailing sentiment we have observed throughout 2024,” Eltorai noted. “As the market begins to thaw, we will gain deeper insights into the speed and extent of recovery in the CRE sector.”
About Altus Group
Established as a leader in asset and fund intelligence for commercial real estate, Altus Group offers clients a comprehensive platform that integrates advanced analytics and advisory services. Trusted by top industry leaders, the firm assists investors, developers, lenders, and advisors in managing risks and enhancing returns across the asset lifecycle. With around 1,900 employees spread across North America, EMEA, and Asia Pacific, Altus Group is poised for further growth and innovation in the CRE space.
Contact Information
Contact: Elizabeth Lambe
Director, Global Communications, Altus Group
(416) 641-9787
Email: Elizabeth.Lambe@altusgroup.com
Frequently Asked Questions
What is the Altus Group CRE Industry Condition & Sentiment Survey?
The Altus Group CRE Industry Condition & Sentiment Survey is a quarterly survey that assesses the current market conditions and future expectations from industry experts in the commercial real estate sector.
What were the key findings of the Q4 2024 survey?
The survey highlighted cautious optimism about the operating environment, a strong intent to transact, and evolving perceptions of pricing in various property sectors.
How many professionals participated in the survey?
A total of 390 seasoned professionals from over 129 firms participated in the Q4 2024 survey, providing diverse insights into the CRE market.
What are the current focus areas for CRE professionals?
Managing existing portfolios and deploying capital effectively were identified as the primary focus areas for CRE professionals over the coming months.
Who can benefit from Altus Group's insights?
Investors, developers, lenders, and advisors in the commercial real estate sector can leverage Altus Group's insights to navigate market conditions and enhance performance returns.
