As CRE cash flows rise, expect 'few years of tough headlines'

The commercial real estate (CRE) space has taken a hit after the COVID-19 pandemic, stemming from the advent of remote and hybrid work setups. Data from MSCI shows that there is $20.5 billion worth of portfolios of foreclosed and seized properties in the second quarter, a 13% increase since the previous quarter.

JPMorgan Co-Head of US real estate stock research Anthony Paolone joins Catalysts to give insight into the current landscape for commercial real estate and what it means for the broader market moving forward.

"Interest rates certainly play a big role in commercial real estate and certainly how the properties are valued. But what we think is pretty interesting is that this move up in rates over the last couple of years, we've seen the publicly traded real estate stocks, the REITs [real estate investment trusts] mainly already adjust to that rate environment," Paolone tells Yahoo Finance. "And so to the extent we get any movement down in rates, we think it's actually pretty positive for these companies. We think the private market is still going to take some time to fully adjust."

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This post was written by Nicholas Jacobino