Moody's Talks - Inside Economics The Sages of CRE
Mar 31, 2026
Kevin Fagan, senior commercial real estate economist at Moody's Analytics, draws on CMBS and banking-focused CRE analysis. He discusses why office recovery is uneven, multifamily faces supply-driven strains, and retail shows a quiet comeback. The conversation highlights price dispersion across property types and how maturities, workouts, and capital shifts shape near-term risks.
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Tom's Academic Roots And Philosopher Alter Egos
- Tom LaSalvia describes his background as an urban economist focused on neighborhood choice and mentions hobbies like golf and philosophy.
- He playfully assigns Mark Socrates/Plato, Cris a Stoic, and Marisa a Descartes-type, connecting philosophy to personalities.
Aggregate CRE Prices Fell But With Huge Internal Differences
- CRE prices fell sharply after early 2022, roughly 15% aggregate peak-to-trough across property types.
- Office and multifamily saw much larger drops (institutional office ~50%, institutional apartments ~25%) while many small-cap assets saw little or no decline.
High Correlation And Massive Dispersion Coexist
- The market shows both record-high correlation driven by interest rates and unprecedented price dispersion driven by structural shifts.
- Higher rates amplified fragility while migration, hybrid work, AI, supply chains and capital heterogeneity created wide divergence across sectors and regions.