My Best Guess on When Deal Velocity Will Return

If you can’t figure out the odds, you can’t make the bet. I can’t tell you how many times I have used that phrase in the past several years, as we have seen numerous market dislocations that have frozen deal activity. The pandemic, political events, capital markets anomalies, leaps in technology, tax law changes, and many other things have happened in the recent past that have given market participants reason to pause.  

2023 is different. A perfect storm of rapidly rising interest rates, economic uncertainty, changes in the way we use real estate, a fresh banking crisis and myriad other things have all occurred at the same time.  Assumptions that have been the baseline for decision-making have been totally blown up,  and the cost of capital has changed so rapidly that fundamental return parameters are still moving around. Too many factors are out of an investors’ control and the market to buy and sell properties is essentially locked up.