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Hoteliers will see more available hotel construction capital this year. Look for lenders to come off the sidelines and consider hotels once again. With interest rates projected to remain stable or decrease, there will be more deals that will work on a cash-flow basis due to the lower interest rates. The projections for interest rates in the near term will allow underwriting to “work” for more transactions. This will allow borrowers to refinance existing deals that have recently opened. More

In CBRE’s 2024 Real Estate Outlook, new opportunities are predicted that can prove beneficial to both consumers and companies. New buying opportunities are projected to materialize thanks to lowering property values and higher numbers of vacancies. CBRE’s economists anticipate that resilient consumer spending will counter economic headwinds next year including high interest rates and near recessions in Europe and China. CBRE predicts the U.S. unemployment rate rising slightly to 4.5% and an easing of inflation that will allow the Federal Reserve to reduce short-term interest rates to around 4.25% by the end of 2024 and to 3.5% in 2025. More

Overall, the affordable market has slowed in 2023 and all signs are showing that trend will most likely continue through 2024. There will be headwinds within the affordable lending space going forward as owners adjust to the elevated interest rate environment. Next year should be very similar to 2023 in the way of total production of new affordable housing units, total preservation of existing units, as well as total loan volume and tax credit equity volume. More

Watch for bridge lending to gain momentum next year. Borrowers are exploring shorter term debt while rates are high and there is an expectation they will start coming down. Also, watch for people to turn to bridge lending as notes come due and more value-add opportunities hit the market. Bridge lending will continue to pick up momentum as many sponsors will not want to sell in the current cap rate environment and/or lock in permanent financing with today’s high rates. Lease-up bridge loans will become more prevalent. More