BGO Chief Economist Lists Top 10 Predictions for 2024
Ryan Severino, chief economist and head of U.S. research at BGO, an international real estate firm with $83 billion of assets under management, including more than $28 billion of industrial assets, recently announced his top 10 expectations for the commercial real estate market and the economy at large.
Severino says that he expects that, while the economy will slow, it will avoid an official recession. He cites the fading of pandemic-related disruptions, resiliency from the ongoing labor market shortage, and a less interest-rate sensitive environment for his prediction.
He also states that he expects inflation to continue to decelerate, which in turn, should contribute to a halt in the Fed’s hiking of interest rates. Severino states that “the Fed will start to think about cutting rates to support growth,” possibly by the end of 2024.
Similarly, Severino predicts that while the labor market may continue to face labor shortages, it “does not break.” He also says that he expects the U.S. dollar to weaken, supporting exports.
In regards to commercial real estate, BGO’s chief economist proclaims that industrial assets will remain “the darling of CRE.” As industrial assets continue to evolve and become a more advanced part of the supply chain, this will create greater value and increased rents, especially for newer, more modern industrial spaces.
The housing shortage will continue, despite increased apartment construction, Severino predicts. Additionally, he forecasts that retail will remain “quietly strong,” as existing retail centers demonstrate an improved efficiency. In regard to office properties, Severino states that they could create compelling opportunities for those with a higher risk tolerance.
Finally, Severino claims that he expects CRE investment to return to positive territory in 2024. “The market will likely remain tentative at first, but should gather steam as the year progresses, especially if the Fed begins cutting rates,” Severino said, via his The Chief Economist newsletter.
BGO is a global real estate investment management advisor and a provider of real estate services, with a track record in the investment and asset management of industrial, office, retail and multi-family property globally.
As previously reported by The DI Wire, the firm recently entered the retail space with the launch of its non-traded REIT, BGO Industrial Real Estate Income Trust Inc.
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