The worsening in total returns to -3.0% q/q in Q4 was consistent with our expectations of bigger-than-average year-end markdowns. But the major takeaway was that the data and NCREIF’s release notes support our view that there will be growing distress and further price falls in the coming quarters. Indeed, even though all-property values are down 16.1% from their Q2 2022 peaks, the declines we expect over the coming quarters will take the peak-to-trough price decline beyond 20%.
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