While the U.S. economy may accomplish a soft landing in 2024, Franklin Street CEO Andrew Wright said commercial real estate is a different story.
The market is still reeling from the rapid rise in interest rates last year, but the ongoing price correction across virtually every asset class presents the best opportunity to jump into the market since 2009, he said during the Tampa Bay Business Journal’s Economic Outlook event last week.
Wright believes the long-term trend of population migration to Florida will drive growth that transcends economic cycles. An estimated 356,000 individuals moved to this state last year, and a far greater share were high-income earners compared to other states with net inflows of new residents like Texas and the Carolinas.
“If you’re able to enter the market now, you have this margin of safety built into every single assumption,” he said.
In the short term, operating fundamentals will continue to erode, expenses will continue to climb, and revenues will remain depressed but, ultimately, transaction velocity will pick back up, he said.