Cushman & Wakefield chairman of global brokerage Bruce Mosler told viewers of The Big Money Show that the commercial real estate market is showing signs of recovery even as yields are up 75 basis points since the Fed began cutting interest rates.

In the bellwether Manhattan market, volume is way up – 33% year-over-year – with 22 million square feet taken between renewals and new space, said Mosler. This compares with 17 million square feet last year.

“I will give you that Manhattan operates a little bit differently than other gateway cities, but we are seeing the recovery,” he said. Much of the momentum is tied to major firms in the financial and tech sectors requiring employees to return to the office five days a week.

“That's having a significant impact on the market and a positive one,” Mosler added.

At the same time, retail closures are at a new high since the onset of the pandemic, which he said points to a shift from high street to experiential retail. The sector encompasses 3% of land mass but accounts for about 57% of GDP in cities like New York.

He said curated retail targeted at the GenZ/millennial generation is dominating Manhattan West, the Penn District and Hudson Yards. Rather than offering a broad swath of products, curated retailers offer a focused collection of products, often based on specific themes or trends. Retail is increasingly focused on high street retail and food and beverage offerings as well as unique concepts including walk-in healthcare.

“It’s really having a positive impact,” said Mosler.

In the housing sector, markets like New York are dealing with some obsolescence, which has spurred grant programs targeting commercial-to-residential conversions. These include the New York City Accelerator Program and the Manhattan Commercial Revitalization Program.

“This next generation of workers needs affordable housing and we have to provide it,” said Mosler. “These are programs that can work.”

However, optimism about the home market has tempered lately as mortgage rates have crept back up and the trajectory of inflation remains unclear.

“It is harder to buy a home right now. The cost of funds is greater,” Mosler noted. “I think we have to be patient to allow this administration's programs to go into effect. Rates have gone up. I don't think they'll stay up. I think they will come back down. We'll have to wait and see.”

Instant Insights /

CRE Recovery Underway Despite Higher Yields, Says C&W Chairman

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