SVN® Internation Corp. Economic Update – Keeping our clients up-to-date about the latest trends affecting the real estate landscape.

An analysis by MSCI Real Capital Analytics reveals a substantial decline in the price of loan collateral over the past year. While 81.5% of loan collateral has experienced a price drop, the majority of loans remain above their origination value, providing a buffer against the market correction. Despite a potential lessening of market risk in the near future, increased attention to current market activity is emphasized.

In the single-tenant net lease (STNL) properties market, Q3 witnessed a significant 19% quarter-over-quarter increase in inventory, primarily driven by a remarkable 144% surge in retail space, notably from big-box properties. While the influx of new supply could ease inflationary pressures, the faster arrival of newer properties compared to the departure of older stock may constrain overall price growth. This dynamic is particularly significant in the industrial sector, where distribution facility supply rose by 19% between Q2 and Q3 2023, partially due to the growing use of sale-leaseback arrangements.

Keep reading below on construction spending, which rose by 0.6% between September and October, the dynamics of inflation and falling energy prices, complicating short-term interest rate policy decisions for the Federal Reserve, and more!