Tim Bodner, world and actual property offers chief at PwC, advised the REIT Report podcast that the business actual property setting is marked by cautious optimism, with traders more and more targeted on how shortly to deploy capital as macro volatility impacts the tempo, fairly than the route, of restoration.
“We like to consider it as a temper of cautious optimism with the dial creeping up,” he mentioned.
Non-public actual property values seem to have bottomed in late 2024, transaction volumes are anticipated to rise 16% to twenty% this yr, and institutional traders have returned as internet patrons, he identified.
International traders, in the meantime, have raised their deliberate U.S. allocation from 11% to 16% over the last yr. “So even with tariffs and political noise, the U.S. nonetheless wins on liquidity, transparency, and simply the choices round progress,” Bodner mentioned.
Sector-wise, high quality issues most in workplace and retail, whereas in areas similar to knowledge facilities, logistics, multifamily, and digital infrastructure, location and entry to energy are more and more important, based on Bodner.
On personal credit score, Bodner mentioned it has moved into the mainstream and is in comparatively robust form in actual property as a result of it’s backed by income-producing belongings. He added that M&A exercise is more likely to speed up, pushed by persistent NAV reductions, accessible dry powder, and stress on smaller public REITs, particularly these below $2 billion in market cap.
Wanting forward, Bodner mentioned return expectations have reset in a higher-rate setting, making earnings sturdiness, operational depth, and scale extra essential. He additionally pointed to main alternatives in senior housing, chilly storage, energy-linked industrial belongings, and sports activities and leisure actual property.
