2024 Investor Survey

2024

Investor Survey INVESTOR EXPECTATIONS SNAPSHOT

Soft-Landing Recession

Downturned Market for Longer Than a Year

No Rate Hikes

Increased Cap Rates

Market outlook Where will the 10-Year Treasury Fall in the First 6 Months of the Year?

Economic Predictions for 2024 Hard Landing Recession

17.1% 1.99% or Lower

1.9%

2.00% to 2.99%

4.6%

3.00% to 3.99%

55.6%

4.00% to 4.99%

35.2%

5.00% or Higher

2.8%

Recovery/Solid Growth

15.3%

Soft Landing Recession

67.6%

67% OF INVESTORS PREDICT A SOFT- L ANDING RECESSION

Duration of Downturned Market

1-3 Months

8%

4-6 Months

6-9 Months

20.5%

33.9%

Longer than a year

37.5%

37% OF RESPONDENTS BELIE VE THE MARKET WILL BE DOWN FOR LONGER THAN A YE AR

0%

75.2%

End of 2024

10.6% ™

Early 2024

8.0%

20% 30% 40% 50% 60%

OVER 50% OF INVESTORS BELIE VE THAT IN H2 2024 THE 10 -YE AR TRE ASURY IS EXPECTED TO FALL BET WEEN 3.00% AND 3.99%

Rates Will Increase In… No Rate Hikes

10%

Mid 2024

6.2%

INVESTORS EXPECT NO R ATE HIKES IN 2024

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Commercial Real Estate FUNDAMENTALS % SHIFT IN INVESTMENT PRIORITIES L AST 12 MONTHS End of Year 2023

Increase

Mid-Year 2023

Increase

22.3%

Unchanged

15.7%

50.0%

Unchanged

45.5%

Investors increase focus on opportunistic strategies in 2024

Reduced

17.0%

Reduced

26.1%

Frozen

10.7%

Frozen

12.7%

Cap Rates are Anticipated to Increase in the Next 6 Months Decrease

None

12.4%

Opportunistic Increase

Value-Add

36.6%

Core-Plus Core 0%

10%

20%

30%

40%

% of Survey Responses Based On Investment Strategy 2022

2023

2024

Remain The Same

38.9%

Regions Investors are Targeting MIDWEST

16.2%

WEST

NORTHE AST

SOUTHWEST

SOUTHE AST

21.6%

8.1%

14.4%

39.6%

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In 2024, CRE Sales Activity Is Expected to Improve While Leasing Activity Will Remain the Same As 2023 SALES ACTIVIT Y

LE ASING ACTIVIT Y

Improve

Improve

Remain the Same

Remain the Same

Worsen

Worsen

Unsure

Unsure 0%

20%

40%

60%

0%

20%

40%

60%

Impactful Technology Within the Next 5 Years Artificial Intelligence

Blockchain

Online Marketplace and Listing Services

Virtual and Augmented Reality

3.8%

60% 60% OF INVESTORS BELIE VE ARTIFICIAL INTELLIGENCE WILL MAKE A MA JOR IMPACT ON CRE OVER THE NEX T 5 YE ARS.

26.7%

3.8%

Cybersecurity

5.7%

office Fundamentals in 2024

What do you believe will happen to outdated office buildings?

20%

Converted to other uses

15% 10% Stay as they are

5%

20%

0% Rents Increase

Occupancy Rates Transaction Volume Remain Consistent with 2023

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Decrease

Renovated and repurposed for the modern workforce

40%

20%

Conversions and adaptive reuse will dominate

20%

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Retail Fundamentals in 2024

Outperforming Subsectors for 2024

30% 20%

Grocery

Automotive

Restaurants

Superstore

38.2%

10%

8.8%

0% Rents Increase

Occupancy Rates Transaction Volume Remain Consistent with 2023

Decrease

GROCERY WAS THE # 1 SELECTED SUBSECTOR TO OUTPERFORM IN 2024.

32.4%

2.9%

Distribution & Medical

17.6%

INVESTORS BELIE VE CONSUMER SPENDING WILL BE ONE OF THE MOST PRE VALENT RETAIL TAILWINDS IN 2024, WHILE INFL ATION WILL BE THE MOST PRE VALENT HEADWIND.

Community Shopping Centers

Optimal Retail Location for the Next 5 Years

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Retail Strip Centers Suburban Centers

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Industrial fundamentals in 2024

Industrial Subsectors to Outperform in 2024

20%

Data Centers

15%

33.3%

10% 5%

Rents Increase

Occupancy Rates Transaction Volume Remain Consistent with 2023

Decrease

23.3%

E-commerce Fulfillment Centers

Distribution

Freight

3.3%

Refrigeration & Cold Storage Buildings

16.7%

Industrial outdoor Storage

10.0%

0%

Warehouse

10.0% 3.3%

Multifamily fundamentals in 2024

CL ASS B WAS THE SELECTED SUBT YPE TO OUTPERFORM IN 2024.

30% 20% 10% 0% Rents Increase

Occupancy Rates Transaction Volume Remain Consistent with 2023

Subsectors to Outperform in 2024

Decrease

Class B

Class C

Class A

Single Family Rentals

Built-to-Rent

Student Housing

42.9% INVESTORS BELIE VE THAT INTEREST R ATES WILL BE THE MOST PRE VALENT MULTIFAMILY HEADWIND IN 2024.

14.3%

21.4%

14.3%

4.8%

2.4%

What Interested Investors the Most in 2023 Retail

19.9%

Multifamily

27.6%

Industrial

Self-Storage

6.6%

Shopping Centers

4.9%

13.3%

Healthcare

4.4%

None

3.8%

Land Development

2.2%

Office

2.2%

Other answers included: SFR/BTR, flex, gas stations, grocery-anchored retail, trailer parks, mixed-use, mobile home parks.

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D I S C L A I M E R : This information has been produced by Matthews Real Estate Investment Services™ solely for information purposes and the information contained has been obtained from public sources believed to be reliable. While we do not doubt their accuracy, we have not verified such information. No guarantee, warranty or representation, expressed or implied, is made as to the accuracy or completeness of any information contained and Matthews Real Estate Investment Services™ shall not be liable to any reader or third party in any way. This information is not intended to be a complete description of the markets or developments to which it refers. All rights to the material are reserved and cannot be reproduced without prior written consent of Matthews Real Estate Investment Services™.

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