It's been an eventful year for CRE gamers. Downward pressure on costs among numerous other micro aspects all sit versus an economic background filled with unpredictability. To assist you navigate this evolving market environment and capitalize on opportunities, please enjoy our annual Green Street Year in Review, which consists of valuable forward-looking insight from Director of Research Cedrik Lachance. We also recap our must-read reports and special insights across essential topical themes, plus new tools and more from 2023 that have provided essential assistance to our clients throughout a year sparking much more questions than responses. Get in touch with us so we can go over how Green Street can likewise support you next year and beyond.

Topical Themes, Reports & Sample Reports

CRE Values: Residential or commercial property prices down 22% from March '22 peak; examine the fundamental chauffeurs of assessment and their effect on share rates, sector performances, deal volumes and more.

Heard on the Beach: A Theory of Everything (June): As is the case throughout the 24/7 world of financial investment punditry, realty talking heads are quickly distracted by the glossy things du jour. It should not be so hard, nevertheless, as there are just 4 primary drivers of return differentials in the arena, and it is easy to assess the impact each is having on a regular basis.
Residential Or Commercial Property Insights: Quarterly Transaction Trends (November): CRE deal volume is an important indication of market health. Green Street's Sales Comps database provides actionable insight on offers of $5M and up. 3Q23 sales volume was down ~ 50% year-over-year and ~ 15% sequentially. Spiking rate of interest in 3Q negatively affected buyer hunger. Access the full report.
Real-Time U.S. & Pan-Euro Commercial Residential Or Commercial Property Price Index (CPPI): Green Street's Commercial Residential or commercial property Price Index is a time series of unleveraged U.S. business residential or commercial property values that records the costs at which industrial real estate transactions are currently being worked out and contracted.

Spike in Real Rates: A march greater in interest rates has made '23 feel like a bad rerun of the '22 film; observe providing market components and changes which undoubtedly correlate to residential or commercial property assessment and threat.

Heard on the Beach: To Survive Till '25, Don't Snore in '24 (November): Like all property classes, CRE gets pushed and pulled by the gyrations of rate of interest, however it is the chauffeur of the latter that a lot of identifies the fate of the previous.
Heard on the Beach: The Spread Effect (June): The info originating from the bond market provides valuable insight into the forces influencing residential or commercial property valuations. One significant chauffeur - the period impact - was in complete display screen throughout 2022 offered the increase in real rates. However, a similarly important signal is how fixed earnings financiers are perceiving risk via credit spreads.

ESG: Factoring "E" into CRE underwriting is a significantly important valuation input; evaluate crucial "E" metrics at the marketplace and sector levels to translate "E" effect on long-term development, cap-ex, and insurance costs.

Residential or commercial property Insights: Your "E" Sensitivity Training (February): Widely various policies and emission intensities are included when factoring "E" impact in underwriting. Sector-level distinctions matter a minimum of twice as much as intra-sector differences. Find out more in this post.
Heard on the Beach: A Pinch of Green (April): It's hard to overlook the drumbeat of nearly every Western federal government's march to a carbon neutral world. Landlords are dealing with increasingly stringent demands to decarbonize and improve structures or face monetary penalties and/or obsolescence. Investor should make every effort to price present and future decarbonization costs and for that reason have a view on the "E" in "ESG".

Debt Markets: The flow of debt to CRE has and will likely stay depressed in the near-term; evaluate how loaning requirements, increasing costs, loan defaults, and banking battles cause difficulties for near-term maturities and refinancing.

Residential Or Commercial Property Insights: Wall of Worry (July): The ebb and circulation of credit availability can have important implications genuine estate rates. In basic, when credit is created, deal activity boosts, pushing up costs and making customers look more creditworthy. Less beneficial loan terms might result in owners needing to fortify additional equity to renew growing loans and a failure to do so might result in forced sales, causing further decreases in realty costs.
Heard on the Thames - Everybody Relax (September): A well-functioning industrial real estate market that delights in good price discovery relies on readily available debt that can flawlessly re-finance maturing loans while partially moneying new acquisitions and developments. When credit streams draw back, transaction volumes stall, and prices normally wobble. Click on this link to download more Heard on the Thames insights.
Debt Insight: Tracking Real Estate Debt (October): The flow of debt to CRE is depressed relative to history. Higher Treasury rates triggering discomfort; CRE financial obligation spreads have increased more than corporates. The cravings to obtain and lend has slowed drastically amongst all individuals.

CRE Fundamentals: M-RevPAF growth still strong, but it's slowing down somewhat faster than expected; assess how advancements in running principles equate to decreases in residential or commercial property prices, deal activity, and overall fiscal health.

U.S. Commercial Residential Or Commercial Property Outlook (December): The increase in 10-year Treasury yields from the high-3% range this summer season to a peak of 5% in mid-October overthrew the industrial real estate deal market and triggered extensive declines in prices. Residential or commercial property rates have fallen 6% over the past three months and 22% from their March '22 peak. Gain additional insights from the most recent associated webinar replay from September.
Pan-European Commercial Residential Or Commercial Property Outlook (October): Pan-European CRE costs (B/B+ quality) decreased by ~ 8% YTD; c. 3% in the previous 6 months. Retail and workplace rates hit hardest; property and industrial yield expansion offset by growing cashflows. Residential or commercial property prices might fall ~ 10% by the summertime of '24; would then be down 1/3rd given that May-22 peak.
Residential Or Commercial Property Insights: Fiscal Friends and Foes (November): Prospective changes to tax problems enforced on residents and property owners across metros can have an essential effect on future overall returns from CRE investing. Quantifying the likelihood of tax policy modifications and pricing it into realty needs art and science yet can likewise prove a crucial driver of future returns.

Sector Themes: Current subjects of interest at the sector-level; increasing growth forecasts, market worths relative to costs, risk-adjusted expected returns, portfolio evaluations, need throughout various markets, and the crucial elements of cap-ex.

Data Center Insights: Artificial Intelligence: Buy the Hype or Sell the Data Center Sector? (July): Is the buzz genuine? Or are we in for a disappointment like previous emerging tech that failed to fulfill expectations varying from 5G to the Internet of Things to the Metaverse?
Euro Residential Insights: Replacement Cost ≈ Redundant Comps (March): Replacement cost analysis is a commonly utilized tool in the genuine estate investment world. However, every analytical structure has its drawbacks and the very same holds true with replacement expense.
Industrial Insights: Outdoor Storage: A Lovely Ugly Duckling (April): Industrial outdoor storage (" IOS") is a niche business residential or commercial property type that has grown in popularity among institutions in the last few years in the middle of the wider industrial boom. Investor need for IOS has actually been buoyed by strong recent operating results, beneficial long-lasting supply demand characteristics, and a de minimis cap-ex burden. Discover more in our post.
Central London Retail Insights: A Forensic Investigation (November): Whilst the holistic takeaway for London's high-street retail is negative, granular analysis - utilizing information from Local Data Company (LDC; a just recently obtained and now Green Street-owned U.K. retail analytics business) - of 2 unique portfolios recommends the unfavorable read throughout is less serious than at very first blush. Download the report or enjoy the webinar replay.
Euro Office Insights: Licking Its Wounds (June): Three years after the start of the international pandemic, European office market fundamentals have relatively held up relatively well, and definitely better than detractors were predicting. Yet, as companies try to bring employees back to the workplace with combined success, it has actually ended up being clear in the information that hybrid work has dented office need over the previous couple of years.
Self-Storage Insights: Rolling Up the Doors on Cap-Ex (October): Green Street's inaugural deep-dive into self-storage cap-ex sheds light as public and private market information on the topic is lacking. Self-storage is anticipated to deliver somewhat below-avg. returns in the private market.

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Notable Product Enhancements in 2023

Coverage Expansion

U.S. Senior Housing Sector: Senior Housing information and analytics throughout the top 50 U.S. markets included to Market Data
REIT Initiations: U.S.: EPRT, BNL, DOC, IVT, LXP, IRT; Euro: CTP, LXI, SUPR, AT1, SAGA, PNDX
Expanded Research Through New Reports: Commercial Residential or commercial property Monthly (global), Euro Heard on the Thames, and Euro Model Portfolio

Enriched Market Data Solution

European Market Forecasts Scenarios: Access five-year forecasts for running fundamentals and appraisal metrics
U.S. Effective Rent Growth & Occupancy: Access historical time series information for U.S. market-level effective lease development and occupancy Rent Comps: Leverage a granular, asset-level view of effective leas throughout 4 sectors

Data Delivery Services

Detailed NAV Models: Provide a deeper view into the assessment drivers of our covered U.S. and European public companies
Snowflake: Seamlessly inquiry on our information or build connections in your company's favored combinations
Excel Add-In: New interface with streamlined authentication enables you to power your models with real-time insights

Other Product Enhancements

" E" Metrics: "E" Sector Sensitivity, potential costs, and effect - helping capital allocators frame threats and opportunities from a green viewpoint
U.S AVM 2.0: Self-select sales comparables and customize weights of 3 assessment approaches across 384 U.S cities
Green Street Sales Comps in React News: Sales Comps and transaction information included to React News articles

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Spotlight on Our Webinar Series Favorites

U.S. Webinars

Challenges Ahead as '24 Looms: Discussion across Residential, Industrial, Office, Data Center, Self-Storage, and Retail with our Research Sector Heads to hear our views on the outlook for each.
Identifying CRE Opportunities: A Market-Level Analysis: Managing Directors Joi Mar and Seth Laughlin discuss key markets and the data/analytics you need to enhance financial investment choices in this dynamic macro environment.
The Upside of "E"-Valuating Portfolios Through an Ecological Lens: Global attention from regulators and financiers on "E" is quickly speeding up. Environmental problems in CRE, especially as they relate to energy and emissions, are complex and opaque. Learn how Green Street is including "E" into our residential or commercial property underwriting.

Pan-European Webinars

U.K. Retail Webinar: A Forensic Approach: Green Street and freshly obtained Local Data Company (LDC) - the UK's most precise retail location insight provider - collaborate to talk about extensive market analysis.
Pan-European Outlook: Patience is a Virtue: Green Street's Research Sector Heads discuss opportunities and confront obstacles facing Pan-Euro residential or commercial property sectors as we cover up '23 and expect what's likely in shop for pricing in early '24.
Pan-European Market Data: Spotting the Right Opportunities: Green Street's European Market Data and Deals service offers exclusive analytics and actionable intelligence to assist personal and public CRE financiers make better financial investment and portfolio management decisions, mitigate threat, and raise capital better.

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Voice of the Green Street Customer in 2023

"The combination of Green Street's premium sector and market analysis, market rankings, and weekly dose of Real Estate Alert is special and unsurpassable. They enable us to remain informed on the state of the market/sector and provide good insights into the future instructions of both." - Private Equity CIO

"Green Street assists our service decision-making strategy and success by providing relative information and analysis in real-time that is sector-specific to our company. We utilize Green Street to benchmark our portfolios, assess possible new markets, and remain apprised of macro developments in the property market." - Real Estate Company CEO

"Hands down, Green Street has the very best information and experts of any CRE research firm. Green Street's credibility is extensive and unequaled. Their credibility is 2nd to none." - Real Estate Company Director & Board Member

"Green Street's research platform provides a level of combined information and analysis that's just not readily available elsewhere. The services and resources you'll receive as an outcome are noticeably remarkable to, and more in-depth than, those supplied by other market rivals." - Real Estate Company CEO

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How Can Green Street Help You?

Data & Analytics: Proprietary analytics and actionable intelligence for public and personal market investors

Research: Unbiased macro, sector, market, and company-level industrial estate research study & analysis

News: Exclusive market-moving news, offer insights, databases and market individual rankings

Advisory: Strategic recommendations for CRE financiers and operators to boost value for stakeholders

Wanting to utilize insight like our Year in Review in your everyday CRE financial investment technique? This is merely a taste of the actionable takeaways, conclusion-driven insights and high-quality, proprietary information we provide to our clients.

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