A “Year of Opportunity” to Come for Multifamily

Dave:
Hello everyone and welcome to On The Market. I’m your host, Dave Meyer. And today we are bringing back one of our most popular guest of all time. His name is Richard Barkham. And if you weren’t around for his first interview or just need a quick refresher, he is the executive director and global chief economist of CBRE. If you aren’t familiar with CBRE, in general, it’s one of the biggest, or maybe even the biggest commercial real estate company in the world. And so they do a ton of research into what’s going on into the commercial real estate markets.
Now, I know not everyone who listens to the show is interested in commercial real estate or is buying commercial real estate, but first of all, I think most real estate investors start with residential and move towards commercial, so it’s helpful to know about it. But I also think a lot of the things that I’m planning to talk to Richard about have parallels between the two markets, between residential and between commercial real estate. Things like rent growth and supply and demand, of which markets are doing well don’t perfectly align, but they often have some overlaps that can be useful to basically any type of real estate investor. So I’m super excited to bring Richard on, and he has great up-to-date information about the market that I think is going to be very helpful for you in planning your strategy in 2024.
I also want to mention one thing before we bring Richard on. It’s a new virtual summit. It’s hosted by me and a couple of your favorite other personalities and BiggerPockets. It’s going from January 22nd to January 25th. And the whole idea behind this is to help you develop your strategy and tactics that are going to work well for you in 2024. We’re pulling out all stops. We have all the best teachers that you probably are familiar with coming to this. And if you want to join on the first day for January 22nd, I will be giving a free state of the market update to help everyone understand what tactics might be working in 2024. And then the subsequent days, which are only available to pro members, are going to be taught by Henry and James and a bunch of other of the BP personalities that are experts in their respective field. So if you wanted to sign up for the summit, you definitely should. Just go to biggerpockets.com/virtualsummit. You get all the details and information there. With that, let’s bring on Richard Barkham from CBRE.
Richard, welcome back to the show. Thanks for being here.

Richard:
Delighted to be here at the start of January 2024. Looking out over the prospects for the year.

Dave:
Well, we’re definitely going to pick your brain on that. But first things first, for our audience who didn’t catch your first appearance last year, can you tell us just a little bit about yourself?

Richard:
My name is Richard Barkham. I’m CBRE’s global chief economist, but I’m also head of research for CBRE in America and globally. For those that don’t know CBRE, we’re the world’s biggest property services provider with I think approximately 380 offices around the world, 110,000 people. And my research team, this usually surprises people, is about 650 people strong. So these are all people who are involved in researching and gathering data on global real estate markets and global real estate trends.

Dave:
I remember being jealous of that figure last time that we spoke. Our research team at BiggerPockets, well, very capable is maybe 1/600th of that size.

Richard:
Well, you can do a lot with a small team.

Dave:
Yeah. Yeah. We do. We do. We don’t have as broad a scope as you do. So let’s just start talking about the general economy. Richard, what did you and your team think was going to happen last year? And if you had to grade yourself on your predictions, how well did you do?

Richard:
Well, we thought there would be a mild recession last year. And in fact, we turned out to the US economy had 2.4% GDP growth. So I think we wouldn’t grade ourselves that highly. I mean a bare pass probably. We weren’t the only economists, including the Fed, that made that mistake. And I have to say, I think if I was to explain that, why did our forecasts go so wrong or why was the economy so good, I put it down to three factors, one of which we could have foreseen, perhaps two which we couldn’t. The first one was just the resilience of the consumer in 2023. And why was that? Well, in other periods, an interest rate hike of that nature would derail the consumer. But in this particular period, I think the consumer, because of refinancing mortgages in the 2020, 2021 kind of period, with all of that kind of fixed low interest debt, was somewhat resilient to interest rate rises. So we might reasonably have seen that, but the consumer performed very well.
I have to say the rest of the story was about government action, which was a little bit more unpredictable. What do I mean by that? Well, we had a debt crisis. You remember the banks, we had the failure of two or three banks. I think if the Fed and the FDIC hadn’t intervened so quickly, we would have had a recession. And it’s like everything the Fed took 18 months to do and the FDIC in the great financial crisis, they did in a week. So I think that was unpredictable.
And the other thing was just that the government deficit blew out from 5.2% to 7.5%, and the reasons were that tax revenue fell short, but fiscal stimulus is fiscal stimulus and it was a very, very odd thing to see. There’s this old phrase, “Don’t fight the Fed.” Well, effectively, the federal government was fighting the Fed. So they came along and a mixture of those three factors gave us that good growth, which we were delighted to see in 2023.

Dave:
Now that we’ve discussed the macroeconomic climate, we’re going to dig into the commercial real estate situation right after this quick break.
Welcome back to the show. We are speaking with Richard Barkham from CBRE. And what about commercial real estate, your area of expertise? It’s been a tumultuous and confusing ride for this industry. So can you just give us a summary of where commercial wound up at the end of the year?

Richard:
If you think about the four main food groups of obviously industrial, retail and multifamily, if you look at it in the simplest way of explaining, this is just the vacancy rate, if you look at those four sectors, you’d say that multi, industrial and retail, the fundamentals are still actually pretty good. So this kind of unexpected growth in the economy in 2023 really fed through into continued good health in the majority of real estate.
Now of course, rental growth slowed because in the case of multifamily and industrial, we’ve got a lot of supply coming online. But the strength of the economy certainly boosted those sectors. And we’ve got a little bit of an increase in vacancy rate, but not much. By contrast, the office sector, vacancy rose almost to 19.8%. We think vacancy will peak at this year at 19.8%. I mean that’s the highest level of vacancy in offices since the early 1990s. So offices have had a pretty tough time this year, but that’s only one-quarter of the real estate firmament. And the alternative sectors, hotels, data centers, self storage, all chugging along quite nicely I would say. So that’s on the fundamental side.
On capital markets, which is the buying and selling of real estate, well, things were very quiet. People were just uncertain about interest rates, so unwilling to commit while there was so much uncertainty about the direction of interest rates. And of course, now that we’ve had the Fed’s pivot or apparent pivot, that sets the scene for a more positive 2024 in terms of investment transactions.

Dave:
When you look at these strong fundamentals across the different food groups as you called them, why are they so much more resilient? I feel like for years we’ve sort of been hearing about a potential decline in commercial real estate. What is keeping it so strong?

Richard:
It’s the economy. People don’t occupy real estate for its own purpose. They occupy it for the utility that it brings. In the industrial and logistics sector, it’s about shipping goods to consumers more quickly. Some of that is used to go through shopping centers. Now it goes through the industrial and distribution network. In the case of multifamily, it’s a slightly different story. There, I think the story, it’s more to do. We haven’t built enough houses. In the United States, we’re short somewhere between two and 4 million housing units, or single family units. So people are renting multifamily units. There’s just strong population growth, strong job growth and not enough houses.
And in the case of retail, well, retail has have the headwinds against it I think since 2016. As you say, it’s one of these things that people talk about real estate, retail being in the kind of downdraft of the digital economy. But over the course of the pandemic, I think the retail sector retailers got better. They restructured their balance sheets. They all have got pretty slick omnichannel retail offerings now. And the thing about retail is we haven’t built any new retail space for 10 or 15 years. So actually there’s a shortage of grade A space in the prime retail areas. So it’s slightly mixed story in each of those sectors, but they all add up to relatively positive fundamentals. Of course in offices it’s different. In offices, arguably we went into the COVID crisis with perhaps a sector with too much accumulated depreciation or too many poor quality offices. And then you’ve had the emergence of technology that’s allowed people to work remotely. And of course, that has changed the usage of office quite substantially. And companies have reduced the amount of space that they’ve been leasing, hence the rise in vacancy.

Dave:
I think this is a good reminder for everyone listening that when you hear the term commercial real estate, it’s not just one big thing. There are many different subcategories of commercial real estate. Today so far we’ve been talking about multifamily, retail, office, but there are also things like industrial, there’s medical, there’s students. There is all sorts of different things that you need to consider and each of them has unique fundamentals.

Richard:
Even if you took retail, most people think about retail as being balls and they think, “Oh, all of those B and C malls, they’re really struggling.” But malls are only 10, 15% of overall retail space. There’s much more retail space in kind of strip format or standalone format and grocery anchored kind of open air format. And that retail that is non mall in the suburban areas is really doing very well at the moment. So you’re quite right, there’s a huge diversity of real estate, commercial real estate, serving a wide variety of locations and different business needs.

Dave:
Great, that’s a great point. Thank you. Richard, I’d love to focus in a little bit on multifamily here for a minute because that is what most of our audience here are investing in or are aspiring to invest in. And from what I see in the data, cap rates are going up not as quickly as frankly I thought they would be going up at this point in the cycle. And so valuations are down a little bit, transactions are down. And it seems like most investors I know are sort of in this wait and see period about what’s going to happen in the multifamily space. Do you have any insights on how that market is evolving?

Richard:
Let’s not forget that the 10-year treasury, which is the kind of benchmark for investors. Why put your money into real estate if you can get a decent return in a secure government security? So the 10-year treasury peaked at 5% in October. Now, we always said that that was too high, that reflected short-term issues and that the 10-year treasury was going to come down. But that spike in the 10-year treasury because it fed through into the cost of commercial debt and fed through into uncertainty and into spreads, really caused investors to… I mean they’d been reluctant to commit all the year, but that was the kind of peak level of uncertainty.
Now as we go into 2024, the 10-year treasury is now at 3.9% where it was when I last looked. So that’s 100 basis points off. And it’s quite clear we’re not quite through the inflation surge yet, but we are 60 to 70% of the way through. And so people are much more comfortable about the fact that interest rates may be higher for longer, but they are heading in the right direction and credit conditions might still be tight and that the cost of loans high, but from this point onwards, they’re likely to be coming down.
And of course, I think on the fundamental side, the single most important variable for multifamily is unemployment level. And I think over the course of ’23 when everybody, including ourselves, was talking about recession, people had a fear that unemployment was going to go up and that then feeds into vacancy. Of course that hasn’t happened. And I think the fact that we’re going to enter 2024 with a reasonable degree of confidence that we get a soft landing, so we might get some increase in unemployment but not much, I think that gives people confidence that the recovery in lettings that took place in June of 2023 is going to continue.
So if I’ve put some numbers on that, at the moment, we’re at a peak level of new supply in the multifamily sector. So there’s a big accumulated wave of construction, something like 90,000 units per quarter going to be delivered all the way through into 2025. But the good news is that 60,000 to 70,000 units per quarter are being absorbed. So some of those units are going to be vacant. But we see vacancy rates only really going up a small portion to their long run averages. And I think letting is going to continue. I think the high cost of mortgages. And we’ve done some analysis that shows that the cost of buying a home is 50% higher than the cost of renting the equivalent. So for the time being, until those mortgage rates come down with relatively healthy employment market, people are going to be setting up home and leasing apartments, and that’s going to keep the fundamentals.
Now, I would say the rental growth that we saw in multifamily over the COVID period reach 20 to 22, maybe 24% rental growth has fallen to probably 0% right now. So there’s not much rental growth nationally, and that reflects the new supply. But there are two ways of looking at that. I mean, I think that’s very healthy. I don’t think 24% rental growth in the sector is good for anybody including landlords and investors. Normal levels of rental growth at around the rate of inflation are what landlords should look towards. And that just means that occupying a home doesn’t become unaffordable for people. If we get those sort of high levels of rental growth, it just attracts politicians who want to, say, control rents and do rent control. So I don’t know. I think things look even despite just the fact that there is a little bit of a balance of supply over demand at the moment, I would say that’s pretty healthy.

Dave:
It’s interesting because when I look at it just frankly and I see all this new supply coming online, it’s actually been going on for a little while now, but we’re in the midst of a sort of a supply glut. And then there are these potential declines in demand due to potential economic headwinds. That’s obviously uncertain, but it’s possible. And you look at the cost of debt and all these different things are going on in the multifamily space, but cap rates just haven’t really adjusted, in my mind, to the level of what would be necessary to take on some of the risk. And so I’m just curious, do you think cap rates are going to increase in the near term? Or do you think they’ve sort of settled out?
And before we turn it over to you Richard, I just want to explain to our audience what a cap rate is. It stands for capitalization rate. It’s a very commonly used metric in commercial real estate. And it’s basically a measurement of market sentiment and how much investors are willing to pay for a given asset at a given time. And when cap rates are low, that tends to favor sellers and it’s not as good for buyers. And when cap rates are higher, it’s better for buyers, not as good for sellers. Just generally speaking. What’s happened over the last few years is that cap rates have gone up a little bit to improve the conditions for buyers, but frankly, to me and the people I talk about, everyone’s still kind of waiting for cap rates to go up. And for all the reasons you just explained, that might not happen. But I’m just curious if you think there’s any chance that they keep growing, or are people just waiting for something that’s never going to happen?

Richard:
Let me just add to your excellent description of cap rates. We always explain it. It’s the net operating income from the property divided by the price. So it’s an income yield, and best equivalent is the kind bond yield. So when that yield is low, it implies the price is high. And when the cap rate is high, it implies the price is falling. So it’s a metric that explains prices. But most people when they look at an investment, it’s like a rate of interest. They want to see, is it 2%, 5% or 7%? And as you say, at the current levels of 6%, people might not be thinking those cap rates. Now, that’s just not enough given that you can get 4% in the bond market. That spread between the bond market and the multifamily market is not big enough.
Well, you’ve got to remember that multifamily, with real estate, you don’t just get the cap rate. You do get some capital value growth over time, maybe on average 2 or 3%, maybe a little bit more than that in the best quality. So you have to add that to the cap rate. So if multifamily cap rates are 6% and maybe over the next five years we can expect 2% capital value uplift, that’s a total return of 8%. And with debt rates at 6.5%, we’re beginning to see that the kind of all in cost of capital that people, if they want to finance multifamily, is coming into line with those forward rates of return. Not on all multifamily assets, but our feeling is that that balance has interest rates come down over 2024. And we probably get some increase, just a little bit further increase in cap rates.
Then at some point over the course of 2024, people will say, “Well, okay, I can get 6.5% Cap rate out of multifamily. I can probably now see 2 to 3% rental growth over the next five years or seven years. That’s a 9.5% rate of return. My all in cost of debt and equity is 8.5%. This is a viable asset.” And I that’ll be the story over 2024, that the equation that stimulates activity in real estate becomes more positive and favorable. And some of that hesitation that investors have made will disappear from the market.
It may well be that in all of these kind of situations when markets have to pick up again, there’s a pioneer group and it may well be overseas capital coming in and people will see overseas capital committee and then think, “okay, it’s safe to go back in.” Or it might be the institutional capital. I suspect it might be that, that the institutional capital, which has been waiting on the wings for two, two and a half years will say, “Okay, now is the time to invest and we can probably get better prices now than we have done in 10 years.” So given the interest rates are heading down, this is the opportunity year.

Dave:
I just want everyone to understand that what Richard’s explaining here is similar to what we talk about in the residential market a lot, which is that one of the main reasons that buying activity has slowed down is due to affordability or a lack of affordability. And so, when Richard says that cap rates might be going up a little bit at the same time where debt costs might be going down a little bit, that increases affordability relatively speaking and makes it generally more attractive to buy real estate and commercial assets, especially relative to other potential places that institutional investors or big time investors could be putting their money.
Now that we’ve discussed the general parameters of the multifamily market, we’re going to talk about distress in the multifamily space after this quick break.
The one thing I’m curious about, Richard, that is the other thing we talk about a lot here and just seems to be talked about but never happens is distress in the multifamily market. I think we’ve been hearing that with all the adjustable rate, mortgages that exist and balloon payments, partially amortized loans, that we’re going to start seeing a lot of distress. But from the data I’ve seen, it’s just not really happening at the level that pundits have been saying it will for the last few years. So can you just share some information about that? Why isn’t that ticking up and is there a chance it might?

Richard:
Well, I can say let’s give you some economics to start with. I think I referred to this at the start of the conversation. One of the reasons we didn’t get a recession in 2023 was just how much the Fed and the FDIC had supported the banking sector, and they’re still doing that. So making that liquidity available to the banking sector takes the pressure off the banks.
Now, they’ve got loans that are underwater. In other words, the value of the property is less than the value of the loan. But the majority of those loans, not all of them, the majority of those loans are still paying the interest on the loan. So in normal times, maybe the banks would want to proceed and put those loans into foreclosure and make sure that their assets were secure. But I think with the Fed providing liquidity and also guidance behind the scenes, that you need to go easy on the real estate sector because I think the Fed is conscious that a real estate crisis could have destabilized the economy. That is one of the factors that’s behind it.
But I also think more generally, we’ve seen this in previous real estate downturns, the banks will work very supportively with I think borrowers, particularly borrowers that they’ve had a long relationship with, but borrowers in general in the acute stress phase of the cycle when interest rates are peaking. But when sentiment improves, banks will want to just tidy up their balance sheets a little bit more. So I do think banks will be a little bit more assertive against borrowers in 2024, and we will see a higher level of distress. I don’t think it’s going to be big enough to derail the banking sector or create huge quantities of fire sale price real estate for investors to pile into. The economy’s just too strong. At rates of unemployment at 3.5%, that level of real estate distress won’t take place.
But I do see banks pushing borrowers, getting the keys back and not wanting necessarily to manage those properties themselves and then putting them up for auction. There are some borrowers out there, particularly borrowers that have got syndicated loans, lots of small lenders that haven’t got deep pockets, but also merchant developers I think that finance construction in the early part of this decade, they’ll find it tough to refinance or to keep going in 2024. I wouldn’t overstate it, but we will see it.
And we’ve done a little bit of analysis of this at CBRE, if I can put this in context. I’m going to use a term that people might not be fully with, but it’s the kind of, we call it the funding gap. It’s the amount of equity that’s needed to go into the sector to pay off some of the loans, to reduce the loan to value to make the banks happy. And we think there’s probably in 2024, something like 100 billion of equity required in the office sector and maybe something like 20 billion of equity required in the multifamily sector and no equity required in retail or industrial. So that’s to put it in context.
The multifamily sector does need fresh equity in certain parts. Now of course, that equity can come from existing investors or it can be written off. And that distressed property, which may be interest to your listeners, may come onto the market in 2024, and we might be just beginning to see the seeds of kind of opportunity.
Now, none of that real estate… But any real estate that can pay its way is probably unlikely to be fire sold, but you might get some assets, some poor quality assets with leasing risk in tertiary locations or maybe even some newly developed multifamily, but with very high vacancy rates. They will be coming onto the market in 2024 and might provide opportunities for people with the right plan and the right perspective, and particularly a long-term perspective. So we do see some distress in 2024.

Dave:
That’s interesting, because yeah, this is totally anecdotal, but I don’t really see it a lot in the bigger groups, but I have heard and talk to people who maybe use bridge or short-term funding in the last two years to try and stabilize not a huge thing, but a 10 unit or a 20 unit asset who are being forced to sell right now because their interest rates when they go to get that long-term debt is just not available to them, especially if they’re inexperienced. I don’t think a lot of banks, it seems, are willing to throw some good money at an inexperienced investor who’s struggling a little bit.
So I am never rooting for someone to lose their shirt, but I just do, for the sake of our audience, want people to be aware that although it’s not going to be a tidal wave of distressed assets or discounted assets as Richard said, that there are opportunities in the multifamily space where there might be some discounted properties if you’re willing to do the work and to rehabilitate them or take on some of the risk to stabilize these properties.

Richard:
No, that’s exactly right. And I would be looking in smaller markets, but also looking at newer product that may be struggling to lease up.

Dave:
Oh, really? Interesting.

Richard:
The newer product that was kicked off in 2020 or 2021. I don’t know that those markets will be available to smaller investors because a lot of that product will be quite high grade and quite large, but I think that’s where the stress is going to hit.

Dave:
Right.

Richard:
But the fundamental thing is, we don’t have enough houses in the United States, so the big… As long as people are confident… The other thing that will kill multifamily is unemployment. If we get our soft landing and unemployment remains somewhere between 3.5 and even 4.5, then you’ve still got enough people in employment that are going to feel confident enough to be able to either buy a home or rent a home. And that provides fairly solid fundamentals. Interest rates may not be going back down to the levels they were in 2009 to 2019, but they are coming down. So I expect this to be a year of opportunity.

Dave:
Wow, that’s good. It’s good to hear that there might be opportunity. One question I’ve been very personally curious about, Richard, that I’d love your take on is with the softness in rent, you said we’re maybe at 0% rent growth right now, there’s been a tick up in vacancy. Is there any potential for that softness to spill into the residential rental market? A lot of our audience operate single family homes or two to four bedroom. Two to four unit, excuse me. We’re just personally just curious, like, if there’s an abundance of, like you said, really nice new A class properties coming on board, could that impact the tenant pool for some of the rentals that our audience typically own?

Richard:
Potentially, yes. I mean, I wouldn’t say that was a nationwide phenomenon. I mean, I think what we are seeing is the bigger wave of supplies in the Sunbelt markets, so Phoenix, Dallas, the Carolinas, Nashville. Those are the areas that… Maybe even Miami too, they’ve got the big supply pipelines. And all real estate competes with all real estate at the margins. And where you’ve got that big supply, those rising vacancies, so it’s falling rents in good properties, then people are going to display normal economizing behavior and go to the better quality cheaper locations. Absolutely, they are. If you want to keep in track with that, then you’ve got to drop your rents to compete.
But I think that oversupply issue is a Sunbelt market issue. And as I said initially, it may persist for 24 months. But I think the recent census that you may have focused on just shows that the drift of population to the Sunbelt cities remains intact. People moving from the high cost coastal cities, New York, Boston, San Francisco, L.A, to the Sunbelt cities because of cheaper cost of living, lower tax and maybe other factors, they will be a solid support for the multifamily sector in the longer term.

Dave:
Well, thank you. That explains it. I know it’s not Sunbelt, but Denver, where I invest frequently, is also listed as one of those highly oversupplied markets. When I start to see those banners on the big buildings that are like “free rent” or “move-in special,” I’m like, “Oh, no, this is not going to be good.” But it is obviously very regional. When you look at commercial building and construction data, if you look at somewhere in the Midwest versus central Florida, you’re going to see very different numbers. And so, important to keep in mind that that’s super regional.

Richard:
For every banner that you can see a free rent, you’ve got a hundred households in Los Angeles who’ve been longing to move to Denver for the last five years but haven’t been able to afford it, can now start to afford it. These things take time to work through the system. That fall in rents will kick off, will awake some latent demand that’s out there.

Dave:
That’s interesting.

Richard:
It’s funny you should say, I think one of the markets where it’s been the hottest recently where multifamily rents are coming down quite sharply is Miami. And that was I think probably the hottest of hot markets. I suppose it’s a story that all real estate investors should keep at the back of the mind. Even the hottest of hot markets eventually calls real estate is a cyclical business. Cycles may be of different length and different periodicity. Sometimes you can get markets that buck the cycle, but you’ve got to think about real estate as a cyclical business and what goes up comes down.

Dave:
Yeah, that’s a very, very good point for people to remember. And oftentimes, I find that by the time you’ve heard that it’s a hot market, it’s probably already the end of the cycle. You may have missed it. So just something to think about. Not to go chasing some lagging data.

Richard:
Yeah. You get the best bargains in the most bombed out markets.

Dave:
Exactly.

Richard:
It’s not for everybody, but if you’ve got a long-term perspective, then the people who make the most money out of estate are those that really can make the long-term work for them.

Dave:
That’s very well said. Completely agree. My last question for you, Richard, before we get out of here is, what would your advice be for real estate investors who are interested in the commercial space? It’s probably mostly multifamily, but just the broad commercial space. How would you suggest they either do research or approach their investing strategy in 2024?

Richard:
You shouldn’t necessarily limit yourself to multifamily. I think there are parts of the retail market that are small enough and manageable enough for smaller investors to take a look at. But I think there’s no getting around doing your homework. You’ve got to kind of understand the supply and demand dynamics in each of those markets. Be very, very aware of new projects coming online. Be very aware of the factors that drive real estate, the kind of population growth, which of the companies that are moving in, where are the jobs being created, where are the houses being put up. Be aware of all of the fundamentals and the linkages there. Be aware of the tax, which is a kind of very movable feast.
But then I think it’s all about relationships. You’ve got to form good relationships with key brokers who know the market. And you’ve got to be a good buyer. You can’t waste people’s time. If you’re going to form good relationships with the brokerage community, you’ve got to do deals. The more deals you do, the more brokers will be willing to spend time with you. So at whatever level you’re at, you’ve got to commit eventually. You can’t just talk to people forever, but I think forming relationships. And also forming relationships with other parts of the financial community, your banks, your capital suppliers, and being a reliable partner for them, these all pay off in terms of having the sport to do the deals when the deals you want to do come along.

Dave:
That’s great advice for a multifamily commercial, and really anything else. I think developing a network is hugely important, but I think you gave a great piece of advice here on how to build a network, which is to be serious and take the people you’re talking to’s time seriously as well. If you’re kicking the tires for a really long time, people are going to just naturally lose interest in working with you. And so it’s really important to build your network but also build some momentum and really start working towards that deal once you start talking to brokers or find to answers or potential partners so that you can get that deal and you don’t get in this cycle of just talking to people about what you hope to one day do, but unfortunately are not actually getting to. So I appreciate that great advice there, Richard.
Richard, if anyone wants to read your outlook on 2024, any of the other great research you and your huge team of analysts do, where should they check that out?

Richard:
Cbre.com, Research and Insights page.

Dave:
Excellent. Making it easy. And we will definitely put a link to that in our show notes. Richard Barkham, thank you so much for joining us. We greatly appreciate it, and hope you have a great new year.

Richard:
Yes, same to you and all your listeners.

Dave:
On the Market was created by me, Dave Meyer, and Kailyn Bennett. The show is produced by Kailyn Bennett, with editing by Exodus Media. Copywriting is by Calico Content. And we want to extend a big thank you to everyone at BiggerPockets for making this show possible.