Happy New Year! At Peachtree Group, we are excited about the opportunities to come.
2025: A New Game for Commercial Real Estate In the new year, commercial real estate stakeholders will have to face the reality of a changed environment - not just the next inning of a familiar game but an entirely new one. The era of easy money from 2010 to 2022, driven by cheap capital, is over. The "higher for longer" interest rate environment is here to stay. The 10-year Treasury yield is now more than double the 2010-2022 average of 2.2%. At roughly 4.5%, I see room for it to climb. It was in 2022 that we witnessed the turning point, marking the shift from a decade of CRE overperformance to what will be a more challenging market. Is CRE still a great investment? Absolutely, but only for those who adapt and can pivot. A successful strategy now requires agility and precision. Broad market plays are no longer effective. With the stock market entering 2025 volatile, especially with upcoming policy shifts, private credit will offer stronger, risk-adjusted returns, and targeted investments will outperform blanket strategies. Most importantly, asset management will be a critical in-house function. The days of relying on low interest rates to hide poor decisions are gone. Only those with a clear path and deep expertise will thrive in this environment. Peachtree Group Peachtree Group Credit Jared Schlosser Brian Waldman Michael Ritz Jatin Desai Michael Harper Brent LeBlanc Daniel Siegel Brian Pascus Michael Gigliotti CBRE Warren de Haan #cre #distresseddebt #hotels #multifamily #2025 #powell #federalreserve #banks # https://lnkd.in/gspUhDqk
