Tim Bodner, global and real estate deals leader at PwC, told the REIT Report podcast that the commercial real estate environment is marked by cautious optimism, with investors increasingly focused on how quickly to deploy capital as macro volatility impacts the pace, rather than the direction, of recovery.
“We like to think of it as a mood of cautious optimism with the dial creeping up,” he said.
Private real estate values appear to have bottomed in late 2024, transaction volumes are expected to rise 16% to 20% this year, and institutional investors have returned as net buyers, he pointed out.
Global investors, meanwhile, have raised their planned U.S. allocation from 11% to 16% during the last year. “So even with tariffs and political noise, the U.S. still wins on liquidity, transparency, and just the options around growth,” Bodner said.
Sector-wise, quality matters most in office and retail, while in areas such as data centers, logistics, multifamily, and digital infrastructure, location and access to power are increasingly critical, according to Bodner.
On private credit, Bodner said it has moved into the mainstream and is in relatively strong shape in real estate because it is backed by income-producing assets. He added that M&A activity is likely to accelerate, driven by persistent NAV discounts, available dry powder, and pressure on smaller public REITs, especially those under $2 billion in market cap.
Looking ahead, Bodner said return expectations have reset in a higher-rate environment, making income durability, operational depth, and scale more important. He also pointed to major opportunities in senior housing, cold storage, energy-linked industrial assets, and sports and entertainment real estate.