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2023: A Year in Review

What were your expectations for the commercial real estate market in 2023, and how did the actual results align with your predictions?


For me, 2023 was focused on action, rightly or wrongly; I don't recall taking stock of what I expected to happen. I think intuitively, I expected the office market (both for sale and for lease) to fall significantly, I expected pain as interest rates rose, and following the trend of 2022, I expected commercial real estate activity to be relatively steady throughout November and December. 

In actuality, I did more office deals than I would have expected. The office market is definitely on shaky ground, but we have yet to see the fall I was expecting. 

Regarding the impact of increased interest rates on the Anchorage/Alaska CRE market, the pain didn't quite materialize. Valuations stayed flat or increased in many asset classes. Some of my multifamily buyers decided to pause and park their money in traditional investments, where a 5% return was easily attainable. Overall, transaction volume might have decreased, but not on the scale I was expecting. Positive news out of the North Slope, Military, Nome Port, North Link, and other infrastructure projects/economic activity was a shot in the arm for the Anchorage CRE market. We saw healthy demand from primary, secondary, and tertiary businesses associated with those projects and those who subscribe to a generally optimistic outlook. 

Lastly, all real estate activity seemed to slow down as soon as the snow started to fall. It is not uncommon to see a cyclical nature in our real estate market; however, our internal activity, as well as MLS numbers, seem to indicate a slow November and December to finish out the year.

I look forward to putting some thought into my 2024 commercial real estate outlook/expectations and sharing them with you all, to then be audited this time next year!


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