Market Outlook
Summary:
HSR's CEO, Joseph Penner, and CIO Paul Perkins reflected on the company's strong performance in 2023 and discussed future market conditions. Penner emphasized that HSR took advantage of its unique market position by acquiring seven properties last year, surpassing the total combined acquisitions from 2019 to 2021.
Perkins predicts a slowdown among investors who were highly active in 2021 and 2022, largely due to challenges in managing legacy assets and difficulties in securing new capital amid a tightening financial climate. He notes that many investors who previously secured short-term, floating-rate loans during a period of low interest rates are likely to withdraw from the market as these loans mature under drastically changed economic conditions and rising interest rates.
Additionally, Penner highlighted that these maturing loans, especially those in the multifamily sector—which accounts for about $1 trillion through 2027—will encounter significant refinancing challenges, often necessitating substantial principal reductions. This shift from an era of abundant capital to a period marked by restricted funding and growing distressed assets opens strategic investment opportunities for HSR.
View the full interview with CIO Paul Perkins here.
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