CRE Leaders More Confident in Their Companies Than Other Businesses
A majority of mostly apartment operators tell JP Morgan they expect a recession this year.
Commercial real estate leaders are slightly more optimistic about their own businesses in the year ahead than the sector overall, according to JP Morgan’s 2023 Business Leaders Outlook survey.
Nearly three-quarters (73%) are optimistic about their own company’s performance with 65% optimistic about the industry’s performance.
Respondents’ portfolios included mostly multifamily assets and 65% said they expected to increase profits compared to the prior year while only 17% forecasted a decrease.
Leaders still anticipate challenges ahead with 55% expecting a recession in 2023 and less than half saying they are optimistic about the global (44%) and national economy (46%).
Nonetheless, a majority are planning to expand into new domestic markets and 88% expect to add or keep staff.
Interest Rate and Supply Chain Challenges Linger
Interest rates and the cost of capital are a top concern, along with the lack of affordable housing and supply chain issues, though 39% say supply chain issues have improved in the past 12 months.
With regard to inflation, the increased cost of energy and hiring and retaining employees are top of mind.
Within ESG, the DEI component is the one they are most focused on.