Capital Seeks Shelter in Defensive CRE Sectors

Office fundamentals in core and secondary markets continue to deteriorate, prompting lenders and equity to retreat or demand more conservative terms. In contrast, multifamily and industrial properties are attracting renewed interest, with capital flows favoring sectors perceived as resilient to cyclical volatility. Hospitality and mixed-use assets remain in a holding pattern, as investors weigh operational risks against potential upside, while allocator positioning increasingly reflects a flight to quality and defensive strategies.

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