Winter 2023/2024 Issue

From the Editor: Uncertainty Clouds Outlook for 2024

By: Jennifer LeFurgy, Ph.D.

The economy is demonstrating resiliency, inflation is easing, and interest rates may hold steady in the coming months. However, even if we avoid a recession, growth is expected to be below average next year.

This issue includes many industry experts’ insights on what 2024 may hold for commercial real estate — including possible approaches to dealing with the current office vacancy situation, the use of artificial intelligence and the attendant growth in data center development.

Development magazine had an exceptionally successful year — NAIOP members contributed dozens of articles, and we enjoyed a record number of subscribers and page views. I am also pleased to welcome Jonathan Rollins as the new managing editor. Thank you for your support, and we wish you the best for the next year. 

Stay connected,

Jennifer LeFurgy, Ph.D.
Jennifer LeFurgy

In Brief

Notable facts and figures on the state of the commercial real estate industry, culled from media reports and other sources.



The number of mezzanine loans and other high-risk loans foreclosed upon this year through October, according to the Wall Street Journal. This is more than double the number for all of last year, and likely the highest total ever for a single year.


The percentage of commercial real estate loans captured by smaller U.S. banks in Q2 of 2023, down from a record high of 34.2% in the first quarter of 2023. Never has the share of lending by these smaller banks fallen so sharply in a single quarter, according to MSCI.


CBRE’s forecast for U.S. GDP growth in 2024. The firm expects economic growth to slow in late 2023, with a moderate recession continuing into early 2024.


The percentage commercial real estate insurance costs have risen annually on average since 2017, according to Moody’s Analytics in a September article in The Wall Street Journal. “Increases can result in hundreds of thousands of dollars or more in additional annual costs, depending on location and size of the property. They can be steep enough to wipe away a year’s worth of profits.”



Billion The transaction volume for data centers in 2022. According to JLL, “The data center sector witnessed record-setting M&A activity and higher EBITDA multiples compared to asset-level deals. While interest rate volatility and regional bank challenges are observed, the data center market continues to attract a variety of lenders including life companies, banks, debt funds, and CMBS/SASB.”


2.3 Million

The number of square feet of office space occupied by AI firms in San Francisco, according to JLL. The firm is forecasting the city’s office market will have around 3 million square feet by the end of 2023.


The historical peak of the average national office vacancy rate in 1991. The national average office vacancy rose to 19.2% last quarter, according to Moody’s Analytics.


The percentage of members surveyed by the Seattle Metropolitan Chamber of Commerce who said that the city couldn’t recover until homelessness and public safety problems were addressed.


750 Million

The number of square feet of leasing activity projected for 2023, according to CBRE. The firm predicts, “While higher-than-expected rent growth in emerging markets could push overall rent growth to just under 15% for the year, vacancy rates will increase more than initially expected as tenant requirements continue to lag new construction completions.


Most Popular From Fall 2023 Development

  1. The Logistics Building of the Future
  2. VanTrust Real Estate: Developing with a Difference
  3. We Cannot Allow the Best to Overwhelm the Good: A Conversation with Joel Kotkin
  4. Seattle Draws Cheers for a Daring Stadium Renovation
  5. Revitalization and Revenue: Office Conversions as a Way to Rebuild Cities

Future NAIOP Events

  • Chapter Leadership and Legislative Retreat, February 12-14, 2024, Washington, D.C.
  • I.CON West, March 11-12, 2024, Long Beach, California
  • National Forums Symposium, May 8-10, 2024, Minneapolis

For the most current information on upcoming NAIOP events, both virtual and in-person, visit



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