In a recent conversation with NAIOP President and CEO Marc Selvitelli on the Inside CRE Podcast, Chad Lavender, president of capital markets for North America at Newmark, outlined a commercial real estate environment defined by improving liquidity, narrowing bid-ask spreads, and renewed investor confidence across nearly every major asset class.
“It’s a constructive market,” Lavender said. He described today’s investors as disciplined, informed and highly strategic.
“The pretenders are out of the business,” he said. “The people who are transacting today are very knowledgeable and are using all the technology and information to their behest to go make better investment decisions.”
That sophistication is translating into stronger pricing transparency and healthier transaction activity. According to Lavender, “the bid-ask gap has narrowed,” while cap rates across many sectors have stabilized.
He also made it clear that, in his view, the market recovery is already underway.
“I’d say we’re definitely in a recovery,” Lavender said. “Blackstone called the bottom last summer, so that’s good enough for me.”
Lavender sees opportunity across nearly every property type, though each sector has a different story driving capital flows.
Industrial remains one of the strongest performers, especially for large logistics facilities with limited new supply. “There’s virtually no speculative development and no supply for the big million-square-footers,” he noted.
Retail has also staged a major comeback. “There’s no new supply in the asset class,” Lavender said. “If there are any tenants going out, there’s a line out the door to come in, and generally at a higher rate.”
Meanwhile, senior housing is attracting significant investor interest after years of underperformance. Lavender highlighted projected NOI growth of 15% to 20% there over the next three years.
Office continues to be bifurcated. Class A assets are drawing institutional buyers and benefiting from scarcity, while Class B properties are increasingly viewed for repositioning or conversion.
One of Lavender’s clearest messages was that debt availability is no longer the constraint many feared two years ago.
“The availability of efficient financing is an all-time high from our perspective and super competitive,” he said.
While private credit has stepped in aggressively, Lavender emphasized that banks are returning in force as lenders seek to deploy excess deposits.
Compared to the Global Financial Crisis, he believes today’s market environment is dramatically healthier.
“Back then, there was no liquidity on the debt side, so you couldn’t really get anything done,” he said.
Looking ahead, Lavender said investors are less focused on predicting interest rates and more focused on economic growth and asset-level fundamentals.
“You can’t control what rates are,” he pointed out. Instead, investors are concentrating on replacement costs, NOI growth and long-term market positioning.
One overlooked opportunity, according to Lavender, is Class B real estate.
“I think the Class B and C side of the multifamily space and your discount to replacement cost and your yield premium to Class A multifamily – I think that’s a great opportunity,” he said.
For the market to fully regain momentum over the next 12 to 18 months, Lavender believes stability will be the key ingredient.
“As soon as we start seeing rapid NOI growth across sectors,” he said, “we’re going to see incredible sales activity pick up.”
Listen to the full episode of the Inside CRE podcast.
This post was created with the assistance of AI tools; all content was reviewed by the author.
