If the inverted yield curve in the U.S. bond market were a character from literature, it would be Jacob Marley from A Christmas Carol, warning Ebenezer Scrooge that he will be haunted by three spirits.
In this case, the yield curve is portending two ghosts: consecutive quarters of negative gross domestic product output, the common definition of a recession.
Memories of the Great Recession are deep scars for Metro Atlanta, especially in the commercial real estate community. After all, Atlanta was one of the last of the major U.S. cities to heal after the Great Recession. Bisnow asked a host of Atlanta commercial real estate experts, including Cortland CEO Steven DeFrancis, on their views about the economy today and a recession's potential impact on the market.
Which asset classes — office, industrial, multifamily, retail — are most insulated this time? Which are most vulnerable?
DeFrancis: Multifamily has proven to be a resilient asset class, historically. Today, multifamily appears relatively insulated due to an undersupply of housing and pent-up demand from still elevated rates of adults living at home. In the U.S. today, there are plenty of people who have jobs, but who do not live independently. We think demand for housing from this group has the potential to fuel multifamily even if job growth slows considerably.