Returns for commercial real estate covered by the MSCI Europe Quarterly Property Index deteriorated at the end of 2023, dragged down by the office market, where capital values fell 13.9% for the year.

When it comes to commercial real estate, much of the attention of investors and the financial press has focused on the state of the office sector, which has been hurting. And while real concerns exist, there are also potential opportunities across and within the various real-estate sectors. 

A rapid rise in interest rates globally rocked the commercial-property market in 2023. We chart the impact on pricing and transaction activity, and discuss what could aid a revival in dealmaking.

After the market dislocation of 2023, investors will be hoping for a calmer 2024 in commercial real estate. We identify five key influences to help investors navigate the challenges and opportunities ahead.  

Investors do not like to realize losses. We examine the link between this loss aversion — an observed phenomenon in commercial-property markets — and a drop in liquidity in key markets around the globe. 

Assertions that there is one “right” measure of pricing for property markets are wide of the mark. We examine an array of data points which shed light on the downturn in prices and liquidity, focusing on the U.K. office market.  

Higher lending rates have hobbled commercial-property investment in one of Europe’s larger markets. We use multiple data sets to assess the impact on listed companies and the trading of assets. 

Total returns for commercial properties covered by the MSCI Europe Quarterly Property Index reached a new low in the fourth quarter of 2022, surpassing the weakest returns seen during the 2008 global financial crisis.

While the direct market impact of Russia’s invasion has lessened over time, there have been longer lasting effects that have exacerbated investor concerns around inflation, rising rates and central bank actions around the globe. We examine the issue through a multi-asset-class lens.

Markets have partially recovered since Russia invaded Ukraine, but questions remain about inflation, economic growth and central banks’ actions. Understanding last year’s performance across asset classes, may help with investment decisions in 2023.

The MSCI UK Quarterly Property Index posted a quarterly return of -11.9% at the end of 2022, the lowest level since 2008.

European commercial real estate’s returns posted their worst performance since the 2008 global financial crisis in the third quarter. The results indicate that a widespread slowdown in Europe’s commercial-property market is underway.

Analysis of prices paid by investors for offices in London and Paris, Europe’s largest property markets, shows a premium has emerged for buildings that have sustainability ratings such as LEED. 

Global trading of commercial property contracted in the third quarter amid rising interest rates and concerns about economic growth. Deal activity fell by almost one-third compared to a year earlier.

Investors in commercial real estate are confronting the lingering effects of COVID-19 on what being an "office worker" means. We debate the pros and cons of hybrid work and its impact on companies and investors.

The U.K. regained the top spot in Europe for…