The fourth quarter of 2022 was impacted by rate hikes and increased borrowing costs in the investment market. The “emergency rates” of the pandemic ended abruptly, as did the fiscal stimulus that accompanied lockdowns and school closures.
Unfortunately, inflation did not end abruptly and looms over 2023 as a potential obstacle for investors. Expectations have now changed profoundly, with rising or flat cap rates expected for every asset in every market. While 2023 is very unlikely to repeat the shock of 2022 with unprecedented rate hikes, the possibility remains of continued tightening.