Ben Breslau, chief research officer at JLL Income Property Trust, participated in a video interview in conjunction with Nareit’s REITwise: 2023 Law, Accounting & Finance Conference held March 21-23 in Phoenix, Arizona.
Following the U.S. banking failures and stresses of March 2023, Breslau said the environment called into question the Federal Reserve’s mandate of price stability fighting inflation and the ability of small banks to continue lending.
“Small and regional banks have accounted for [roughly] 67% of commercial real estate lending,” he said. “People don’t realize how big of a force that segment is.”
Turning to the office sector, Breslau noted that the pandemic “liberated” office workers, but that there has been a shift toward a hybrid work model.
“Hybrid has a lot of different definitions to different people [but] it’s been mostly built upon catering to employee preferences,” he said.
Breslau also said that the near-term outlook for commercial real estate is “a little bumpy,” but that JLL believes that real estate overall will perform well after the current choppy pattern passes.