U.S. CMBS 2024 Outlook: Resilient Retail and Unloved Office Bookend Slow and Steady Growth for Multifamily, Industrial, and Hotel

With high interest rates and lingering inflation our expectation is for no material improvement in the overall commercial real estate sector until mid-2024, thereby limiting the prospects for growth in new debt originations. Even as the economy is maintaining positive momentum, although slowing, transaction activity has been and is expected to remain muted until the Federal Reserve adjusts monetary policy in a meaningful way, or the bid-ask spread on commercial assets narrows.

Because of this, DBRS Morningstar expects that new issuance will improve slightly but remain lackluster. We forecast 2024 new issuance volume of about $72.5 billion, up 17.5% from $61.7 billion in estimated 2023 volume as of the date of publication.