With an unprecedented number of sizeable interest rate hikes in a relatively short time, the past year has been a time of adjustment for investors in commercial real estate. While real estate continues to be viewed as a valuable addition to both institutional investors' and high-net-worth investors' portfolios and a good hedge against inflation, lending standards have tightened, mortgage rates have risen and it's harder to reach the same kinds of yields that were possible a year or two ago. Yet experienced real estate investors know how to make any environment work for them and reap the benefits. We looked at how eight firms are adjusting to the current changes in the commercial real estate market.

You can read about all of their strategies here.

Rising interest rates are changing the calculations for real estate investors who rely on debt to make their acquisitions. Some asset classes work better than others in this environment, but a lot of the sentiment about what’s worth buying continues to be shaped by the dynamics in place since the start of the pandemic.

In general, there won’t be as many investment sales deals with higher rates, according to Jim Costello, chief economist, real assets, for data firm MSCI. The more risk-friendly lenders in the debt fund world have pulled back with interest rate increases, he says.

Buyers and sellers also remain far apart on expectations at the moment because buyers don’t want to pay yesterday’s prices for assets, Costello says. If owners have a low cost of debt and cash flowing, there’s no reason for them to take a loss.

As interest rates “begin to bite,” there’s going to be greater consideration given to property fundamentals and sector resilience when making investment decisions, according to Darin Mellott, senior director of capital markets research at commercial real estate services firm CBRE.

We took a look at what different property sectors can offer highly-levered investors under these new market conditions.

You can see the full gallery here.

Young people are moving back to the big cities, defying the predictions that prevailed in the initial months of the COVID-19 pandemic that urban areas would no longer be in demand. Recent data from RentCafe, a sister company of real estate data firm Yardi Matrix, shows that Gen Z, or Zoomer, renters—those under the age of 25—have largely been filling out apartment leasing applications in the traditional gateway cities, including New York, San Francisco, Philadelphia and Boston.

We look at RentCafe data for which cities saw the greatest increases in the number of apartment rental applications from Gen Z members last year.

To see the full gallery, click here.

With vacant industrial space still hard to come by, U.S. industrial rents continued to rise in February, according to the most recent report from CommercialEdge, a commercial real estate data platform powered by Yardi Matrix. The firm reports that average rents for in-place industrial leases reached $6.45 per sq. ft. during the month, representing a 4.4 percent increase compared to February 2021.

In our gallery we lay out which markets showed the greatest jumps in in-place industrial rents from February 2021 through February 2022, as estimated by CommercialEdge researchers.

Here’s a link to the complete gallery.

While this is a tumultuous time for commercial real estate investors as they try to grapple with rising interest rates and a potential economic downturn, the self-storage sector continues to be viewed as an attractive investment. StorageCafe, a nationwide storage marketplace powered by Yardi, recently looked at the U.S. markets that saw the highest volume of self-storage construction over the past nine years.

Based on their data, we look at where developers have been delivering the most self-storage units.

You can view the full gallery here.

Competition might be easing just a bit in the U.S. housing market as mortgage rates decline, but that hasn’t taken any pressure off the apartment rental market. But of course, the competition for new apartments is not the same everywhere. RentCafe put together a list of the most competitive apartment markets in the U.S. with a competitiveness score that combines the market’s current occupancy rate, the share of new apartment units being added to the market, the average number of days an apartment stays on the market before being leased and the number of renters applying for each apartment.

To see the full gallery, click here.

In spite of a bit of cooldown in investor interest in life sciences assets in recent months, this sector of the U.S. commercial real estate market continues to post impressive property fundamentals. A recent report from commercial real estate services firm CBRE found that in the second quarter, the average vacancy rate in the 12 largest life sciences markets declined by 10 basis points year-over-year, to 5.2 percent, while average asking rent rose to $54.77 per sq. ft.

Our gallery lays out what is currently happening with supply and demand in each of the 12 markets CBRE looked at.

You can look at the full gallery here.

While the office sector continues to face some challenges from a slower than expected return to the office post-pandemic and an uncertain outlook for the economy, investors have continued to bet money on office assets throughout the country.

Data firm Yardi Matrix estimates that through the first three quarters of 2022, office investment sales totaled $69.3 billion. Research firm MSCI Real Assets estimates that office investment sales volume trended even higher through the first three quarters of the year, reaching $88.5 billion, just one percent off the figure reported for the same period in 2021.

A recent National Office Report from Yardi Matrix takes a look at the markets that saw the highest office transaction volumes year-to-date.

You can see which markets made the list here.

Amid rapidly rising interest rates and still murky economy outlook, the multifamily market in the U.S. is beginning to feel the impact. Multifamily rents continued to rise this October, by 8.2 percent year-over-year to an average of $1,727. However, the growth was the slowest recorded since mid-2021, according to the October National Multifamily Report from data firm Yardi Matrix.

Yet even in this environment of slower growth, 25 of the 30 top U.S. markets posted multifamily rent growth of 5.0 percent or more. Here’s Yardi Matrix’ breakdown of where those markets are, along with forecasts for the full year 2022.

You can view the full gallery here.