The 2024 capital markets outlook is that much remains the same. Credit is scarce and the capital markets remain unpredictable. Whether the Fed will cut rates in four months, six months, or even nine months, many investors believe that defense is the best offense. The preceding ten years created a fascinating environment with cap rate compression to historic lows and a substantial amount of newly issued debt. Today, the industry is entering a period of transition where cap rates are starting to progress upward, and historic levels of debt are being repriced in a higher cost of capital environment.
The Bureau of Labor Statistics (BLS) reported that nonfarm payrolls rose by 339,000 in May 2023, in line with the average monthly gain of 341,000 over the prior 12 months, but above the upwardly revised gain of 294,000 in April and 217,000 in March. Market expectations had called for a gain of 195,000 jobs. Of note, revisions added 93,000 positions to total payrolls in the previous two months.