2023 CAPITAL MARKETS OUTLOOK

NATIONAL CAP RATES & INVESTMENT INSIGHTS
We characterize this next chapter as one of delicate rebalancing and recalibration of all elements (debt, yields, fundamentals, and pricing of risk). Think about it this way: in past cycles (even if we just take the pandemic as the most recent example), the capital markets disruption came about largely as a result of uncertainty surrounding fundamentals, income and growth. We had central banks propping up liquidity, we
had low interest rates and accommodative monetary policy. The uncertainty was concentrated in fundamentals: could tenants pay their rent? What would the post-pandemic economy look like? Was this the end to fitness, to theatre, to entertainment, to hospitality? If the asset offered strong income growth prospects, the thesis was there, and the capital was there.