A reader waking up from a quarter-long slumber on April 1, 2025 would be forgiven for confusing the headlines for an April Fools’ Day prank. They would scan the news and see stories about:

• large tariffs alternately announced, rescinded, delayed and reintroduced at a breakneck pace (see LaSalle Macro Quarterly, or LMQ, p. 4);
• US equities in correction territory as ex-US markets, including even China’s, outperform (LMQ p. 25); 
• increasing calls that the risk of a US recession is rising (LMQ p. 20); and 
• substantial upward revisions in forecasts of long-term European GDP growth (LMQ p. 21). 

Each of these is at least partly (and in some cases completely) contrary to expectations from the beginning of this year. But the quick reversal in the economic narrative is no April 1st joke. The post-election consensus of a supercharged US economy pulling ahead of the rest of the world has clearly been challenged, if not upended. 

In this period of elevated policy uncertainty, real estate investors should focus on what they can and should do amidst all the noise. At the risk of stating the obvious, we think it helps to take a step back and break down the analysis into three basic steps of incorporating news flow into investment strategy — the what, the so what, and action steps. But as we will discuss, the first two are characterized by so much uncertainty that it is also helpful to start from the end and work backwards, asking: What can investors do to improve their chances of successfully navigating this environment regardless of what happens?

Contributors:

Brian Klinksiek

Global Head of Research and Strategy

Petra Blazkova

Managing Director, Research and Strategy

Listen in as Dave White and Dominic Silman discuss questions about debt investing in Europe:

0:10-1:37 How have RED opportunities changed in the last few years?

1:38-2:50 How has LaSalle determined where and what to invest in?

2:54-4:21 What does all of this actually mean for investors?

Listen in as Dave White and Brett Ormrod discuss questions about debt investing in Europe:

0:10-1:10 Why do green loans seem to be the exception?

1:12-2:03 How is this affecting the market?

2:05-3:03 How are sponsors and investors responding to these challenges?

3:05-3:45 What does this mean for investors bottom lines?

3:48-4:37 How would you summarise the current opportunity?

The summer and autumn of 2024 saw growing optimism among real estate investors. The belief that the dawn of 2025 would open with sunny skies for the real estate market was driven by falls in interest rates from peak levels, fading economic growth concerns and real estate valuations now more aligned with market transactions.

But with more uncertainty creeping into the picture in late 2024, especially around longer-term interest rates, what we see could be described as a “partly cloudy sunrise.”

Contributors:

Richard Kleinman

Americas Head of Research and Strategy

Chris Langstaff

Canada Head of Research and Strategy

While dawn is universal, across Europe it can appear different from each location and every angle. European real estate is transiting inflection points following a deep capital market correction. The INREV ODCE index shifted in the latest quarter from declines to positive after seven down quarters.

Against this backdrop, we share our Impressions of a Rising Cycle in Europe, with a focus on what makes the region different from others across the globe. We also share our five key strategy themes for investors in European real estate for the year ahead.

Contributors:

Dan Mahoney

Europe Head of Research and Strategy

Dominic Silman, PhD

Europe Head of Debt and Value-add Capital Research and Strategy

Petra Blazkova

Europe Head of Core and Core-plus Research and Strategy

In the Global chapter of ISA Outlook 2025, we look at how to make the most of this new dawn and the opportunities it may present, but with a watchful eye on ways the new day could go off track. We examine these through four broad themes in this year’s report: the morning sky, the capital stack hangover, the breakfast menu, and the early bird.

We examine each of these concepts in turn, and ask what each means for real estate and they intersect with one another and other key trends.

Read more at: https://www.lasalle.com/Outlook2025

Contributors:

Brian Klinksiek

Global Head of Research and Strategy

Eduardo Gorab

Managing Director, Global Research and Strategy

We regularly receive questions about past property market dislocations and what they might tell us about today, such as: Is office the new retail?, Will the 7+ years it took retail to rebalance be a template for office? and Should we be worried about the wave of supply in US apartments?

In our latest ISA Focus report, Rebalancing past and present, we engage in patten recognition across a range of historical episodes of occupier market challenges. We present a framework for how these imbalances tend to be resolved, and discuss the range of structural and cyclical factors that drive rebalancing. We also present a selection of historical case studies from around the world, highlighting the complex nature of the rebalancing process and how it can occur not only at different speeds, but also with “bumps in the road” for investors.

Contributors:

Brian Klinksiek

Global Head of Research and Strategy

Chris Psaras

Senior Strategist, European Research and Strategy

Heidi Hannah

Senior Strategist, Americas Research and Strategy

Kyra Spotte-Smith

Associate, Research

One of the most important factors we consider when deciding where to invest capital is the transparency of a real estate market. This encompasses the transparency of market fundamentals and investment performance, as well as:

During times of heightened uncertainty, transparency is more important than ever as a foundation that allows real estate occupiers, investors and lenders to operate and make decisions with confidence.

Our latest ISA Focus report, Transparency and Strategy, explores these factors and their implications for real estate investors. We release this report alongside the Global Real Estate Transparency Index (GRETI) for 2024. GRETI is a joint publication between LaSalle and our parent company, JLL, which is based on a global survey of our extensive network of real estate market experts.

Contributors:

Brian Klinksiek

Global Head of Research and Strategy

Eduardo Gorab

Managing Director, Global Research and Strategy

While traditional banks’ appetite for providing commercial real estate loans has declined, other lenders (including investment management firms such as LaSalle) have moved in to fill the funding gap. As a result, we have recently seen increasing interest from institutional investors in real estate debt.

But what is it about real estate debt that makes it a compelling investment? As the second largest of the “four quadrants” of real estate, it has a value in the US and Europe alone of approximately US $4.5 trillion, representing an enormous opportunity. Real estate debt historically has produced competitive risk-adjusted returns in addition to showing low correlation to other assets.

In our latest research, we examine the three-part case for investment, including:

Contributors:

Brian Klinksiek

Global Head of Research and Strategy

Dominic Silman , PhD

Europe Head of Debt and Value-add Capital Research and Strategy

Jen Wichmann

Senior Strategist, Research and Strategy

Hina Yamada

Senior Research Analyst, European Research and Strategy

We published the global chapter of the ISA Outlook 2024 on November 14, 2023, just before euphoria about a potential ‘V’-shaped property market turnaround emerged. Interest rates fell quickly as financial markets priced in several US Federal Reserve (Fed) rate cuts in 2024. For a time, it looked as though our prediction that it would take a little longer for markets to digest a renewed spike in rates would not age well.

In this Mid-Year Update, however, we look back to find an outlook with an uncanny resemblance to that of six months ago. This is not because nothing has changed, but because the mood has gone full circle. The landscape remains characterized by interest rate volatility, soft fundamentals in some markets, and gaping quality divides, but also by pockets of considerable strength. Another factor that has not changed is that financial conditions (i.e., interest rates) remain the dominant driver of the market, and that political and geopolitical uncertainties are in focus in many countries.

Contributors:

Brian Klinksiek

Global Head of Research and Strategy

Eduardo Gorab

Head of Global Portfolio Research and Strategy