Trepp 2022 CRE Sentiment Survey: Commercial real estate expected to avoid severe damage despite economic headwinds

Trepp’s second annual sentiment survey called upon market participants to answer a series of questions related to the economy, regulation, CRE fundamentals, and CMBS distress.

Trepp, a provider of data, insights, and technology solutions to the structured finance, commercial real estate (CRE), and banking markets, has just released its second annual CRE Sentiment Survey results, which revealed that while the market is concerned about upcoming economic headwinds, CRE will avoid the worst.

In a pivot from assessing recent market events and data trends weekly, The TreppWire Podcast team surveyed CRE participants to gauge market sentiment for the coming months.

Trepp’s second annual CRE Sentiment Survey called upon market participants to answer a series of questions related to the economy, regulation, CRE fundamentals, and CMBS distress. Almost 50% of the respondents were CRE practitioners. Other respondents came from professionals at banks, capital markets/structured finance companies, and in the academic world. The specific job functions of those filling out the survey included asset managers, brokers, commercial mortgage-backed securities (CMBS) and CRE investors, lenders, property owners and risk managers. The survey revealed some interesting trends.

Not surprisingly, inflation, higher interest rates, and supply chain constraints were the biggest macro concerns in the survey; we polled the market to gauge how these conditions would affect the CRE market, and the businesses within that landscape.

Martha Coacher, Trepp’s chief marketing officer

The net of the results is that there is real concern about economic conditions negatively weighing on business in the next 6 to 12 months, but generally, a recession is not likely until the end of 2022 or 2023. On more CRE-specific questions, participants were more optimistic about leasing activity than sales activity. While more than half of the audience felt CRE fundamentals would be somewhat worse over the next six months, only 6% said the conditions would be significantly worse.

Taking individual responses and trying to craft an overarching narrative can be risky; however, this year’s results seem to suggest that businesses are confident they will weather the impending storm, despite current economic conditions.

Manus Clancy, senior managing director at Trepp

To access the executive summary and to see additional results and findings from the 2022 CRE Sentiment Survey, visit the Trepp website.