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  • Writer's pictureSebastian Torres

Real Asset Trends - 2024

This article from MSCI Inc. has some great information about things to keep an eye on in 2024.

Here are some of the highlights I found worth pointing out:

1. Distress starts to bite as loans mature

-- "Distressed sales have represented just a small fraction of the U.S. market in 2023, at a 1.7% share of investment, despite steady growth in distress levels since 2022."

-- 'The wave of loans facing maturity, and the timing of when these loans come due, could lead to additional forced selling."

2. Mind the gap: Buyers and sellers need to meet

--  "If investors expect that, with inflation falling, central banks are largely done with the tightening cycle, this may allow buyers and sellers to move closer together."

-- The MSCI Price Expectations Gap indicates that of 143 market segments measured in Q3 2023, 99 will need further price reductions to restore liquidity to long-run averages.

3. Office performance may trigger a double dip

-- "A double dip in property performance after the initial interest-rate-led declines of late 2022, cannot be ruled out due to factors including higher-for-longer rates and weakening global economic growth. Weakening tenant demand in the office sector is also a key factor."

-- "The biggest price reductions appear necessary in office properties, with an average gap of ~17% across all office markets covered."

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