Treasury yields eased slightly in Q1 but have since risen again. With property cap rates broadly flat, our valuation scores continue to point to overvaluation. This reinforces our view that any investment recovery in 2025 will be weak.
We think that there is still a gap between appraised values and sale prices, which implies further downward pressure on appraisal-based indices. We expect the pressures on values to be most intense for industrial (which are most overvalued) and offices (where rental prospects have been permanently dented by remote work).
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