The Recession That Loomed

The U.S. economy has been going through a rough patch, as economies are prone to do now and then. Last year, it met the informal threshold of a recession with two consecutive quarters of negative gross domestic product growth. But despite that, the National Bureau of Economic Research has not officially declared a recession yet. Typically, it takes them about a year to make that call as a recession is based on a broad range of economic factors. Usually, it is long after a recession is widely recognized that the commercial real estate industry feels it. Leases typically don’t expire until after these slowdowns happen. But this time, commercial properties had largely been the early indicator of the storm brewing. Occupiers were already in a holding pattern trying to understand the true scope of the return to work. 

As much doom and gloom as I read about struggling properties, I am not too concerned about the industry as a whole. Commercial real estate owners are in it for the long haul. This is an industry with some of the longest time horizons regarding investment thinking. My guess is that they will likely see a mild recession as just a speed bump, not a roadblock. If anything, this will probably push the industry to be more innovative in the way it operates and make it even more resilient for inevitable future recessions. 

Economists have predicted that the 2023 recession would be more of a white-collar recession, which means it could hit the office

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