DLA Piper Forecast: CRE Strong, Opportunity Zones Still Hot

DLA Piper Forecast: CRE Strong, Opportunity Zones Still Hot

Commercial Real Estate News Update

September 2019

DLA Piper Survey: Strong CRE Outlook, Opportunity Zones are Strong

Commercial real estate executives are feeling positive about the industry’s future, according to DLA Piper’s annual State of the Market Survey. The survey shows that 50% of executives have a bullish outlook on the market, while 38% are taking a neutral position and just 12% feel bearish. Respondents noted that Opportunity Zones and ecommerce should drive investment in the coming years, while coworking may dwindle and property technologies could have less impact in coming years. Read more in Commercial Property Executive.

More on the DLA Piper Summit

DLA Piper’s real estate forum, in its 15th year, gathered intel from many of the industry’s key companies. Executives from Blackstone, Brookfield, USAA Real Estate, Ventas, The Cohen Group, Hines, Wells Fargo, Goldman Sachs and others met in Chicago to discuss a variety of topics, from interest rates and policy to proptech and industry outlooks. Here are the key comments of note:

Wells Fargo — the $3.5 billion mortgage business is seeing delinquencies at an all-time low at 1 percent. This compares to a 9 percent delinquency at the peak of the great financial crisis.

Citigroup — While many reference the length of this economic cycle and question what inning we are in, Citigroup executives note that baseball is not limited to nine innings. As an aside, baseball fans can check out this MLB.com article for a recap of the many ways to slice and dice the longest baseball game, the longest double header, etc.

Goldman Sachs & Co — Their investment banking division noted that many studies point to loan-to-value improving ratios in CMBS’. As for Goldman Sachs, they are focused on markets they like, sponsors they like, with perhaps a slightly riskier loan to get to the right cost of capital.

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