MSCI Real Assets

As widely anticipated, the Federal Reserve cut its policy rate by 25 bps, the third easing in a row. But what does this mean for #commercialrealestate borrowers? Many investors hoped monetary easing would quickly bring mortgage relief, yet this has not been so simple. Despite recent cuts, borrowing costs across 10-year U.S. Treasuries, corporate bonds and residential-mortgage rates remain elevated. #MSCIResearch explores this topic and other defining influences for the U.S. #commercialproperty market in 2025 in the latest edition of US Capital Trends. Read the report (client access only): http://ms.spr.ly/6040oZAkM #CREdata

We have a gift for you – the top four articles that grabbed our readers’ attention in 2024 – all found in the December Monthly Newsletter.

From all of us at MSCI, we wish you a happy holiday season and a prosperous New Year! Let’s take a moment to celebrate the biggest moments we shared together in 2024. http://ms.spr.ly/6049oZKxX

The downturn in U.S. real-estate performance focused attention on the appraised values of #commercialproperty, particularly those undergoing the harshest reset, such as CBD offices. Would using more transparent measures of value, such as transaction prices, benefit investors and the industry? #MSCIResearch has more: http://ms.spr.ly/6047op7xZ #CREdata

Commercial-property asset managers in the U.S. face an insurance-cost burden that’s doubled in five years. #MSCIResearch illustrates the rise and discusses the influence of extreme-weather events. Read more: http://ms.spr.ly/6040oMeZu #climaterisk #CREdata

Timing matters. The #CRE market has moved against owners in the last two years, as interest rates soared to multidecade highs, yields increased, prices fell and liquidity plummeted. Few owners would opt to trade assets in this environment unless forced due to difficulty refinancing loans, for example. Why? Because in periods of uncertainty buyers will require discounts on the asking price to get deals over the line. Looking at sales of offices in Central London — the world’s largest office market and the top choice for cross-border capital globally since 2007 — we clearly see the importance of timing. Owners who sold their office buildings in 2021-22 made an average unlevered cash return of 4% per annum, according to MSCI data; however, investors who traded in 2023-24 have made an average annualized cash loss of -1%. Losses worsened for properties bought in the last 10 years, with an average annualized return of -3%. #CREdata

Learn how EU real estate is pricing, understand how Asset Owners are structuring private asset investment teams, and watch on-demand our recent webinars– all from the November Monthly Newsletter.

MSCI’s top three insights from our recent Client Day feature US property markets and sectors that are benefiting from a boost in transaction volume, explain what the impending wall of maturing loans means for market risk, and how highlights how investors can use our Mortgage Debt Intelligence tools to identify opportunities. 

Are your real estate investments at risk of extreme weather impacts by 2050? Read our latest report, which analyzes a global sample of 50,000+ properties, to find out how many additional extreme weather days may be expected across global metro areas by 2050. Download the report - http://ms.spr.ly/6046WQC3e

The light is there, but the tunnel is long. While monetary-policy easing has given investors some hope for a rebound in the global #commercialproperty market, rate cuts won’t solve all the challenges ahead. #MSCIResearch outlines the state of the recovery in returns, transaction volume and asset pricing: http://ms.spr.ly/6045WYXOt #CREdata