Patricia Kirk

The sector continues to be viewed favorably in the marketplace. But potential returns are lower, leading to a reassessment by debt and equity investors.

Many lenders have stopped financing office assets, and those that do are offering less favorable terms and scrutinize deals closely.

In spite of still stellar property fundamentals, both industrial developers and lenders prefer to play it safe on new construction.

There’s so much institutional capital in the market, even problematic office assets can find buyers, albeit at a discount, notes CREXi COO.

Lenders tend to be cautious on such projects and most investors might be looking for returns that are higher than office building prices right now would support.

Office loan delinquencies and distressed office sales remain subdued, though the sector is facing headwinds.

More states are legalizing marijuana. But so far, that hasn’t translated into much greater opportunities for real estate investment.

Investors in the sector have been more reluctant to close deals as the cost of capital rises. But given a strong outlook for income growth, many acquisitions are still going through.