CW – U.S. Midyear Outlook, 2024

The U.S. Midyear Outlook for 2024 anticipates slowing economic growth and decreasing shelter inflation, prompting the Federal Reserve to make a pivot in the fall. The capital markets are embracing the concept of higher-for-longer, leading to more price discovery and increased optimism for future activity. The industrial sector, despite decelerating rent growth, remains strong with ongoing adjustment to higher rent levels among existing leases. In the multifamily sector, while attention is focused on supply waves, strong demand is offsetting the impacts of development on vacancy rates. The office sector continues to face challenges due to hybrid work adjustments, but certain markets and products are faring better than others. Retail is experiencing a lack of supply, with a low vacancy rate and more store openings than closings. The lodging sector is benefiting from pent-up travel demand, with cost-effective and luxury options expected to be more insulated from inflation's impact on middle- and lower-income households. Alternatives, especially those with residential and data center components, continue to be favored by secular demand drivers.