Kevin Fagan, Moody's Analytics head of commercial real estate economic analysis, joins Asking for a Trend to discuss the state of the commercial real estate market.
While many companies have implemented return-to-office mandates, he notes that demand for office space has improved significantly. However, it still is well below pre-pandemic levels. He adds,"What's really important for real estate is for us to figure out, what kind of space are tenants going to take per employee now in this hybrid work environment? And a lot of tenants still aren't sure about that. It takes a long time for these leases to roll over.
Um, but generally speaking, you know, that's one of the major trends and you kind of have some markets that are worse than others like San Francisco's been, you know, the redheaded stepchild to use an old phrase for a little while now, but even there's been some improvements off the bottom there.
Uh We had two quarters in a row of positive lending volume so that uh well, it's not, the numbers aren't anything to get excited about the momentum uh is going in the right direction and rates, uh stability around rates in particular will help that.Yeah, I mean, it's still well below pre pandemic levels.
I'm just curious is that any sense of whether that was that an actual real trend, it might become more of a real trend over time.