1、 2024 APOLLO GLOBAL MANAGEMENT,INC.ALL RIGHTS RESERVED.The information herein is provided for educational purposes only and should not be construed as financial or investment advice,nor should any information in this document be relied on when making an investment decision.Opinions and views express

2、ed reflect the current opinions and views of the authors and Apollo Analysts as of the date hereof and are subject to change.Please see the end of this document for important disclosure information.March 2024 Scott Weiner,Partner,Global Head of RE CreditKEY TAKEAWAYSAggressive interest rate hikes by

3、 the Federal Reserve and other central banks have led to a valuation reset in commercial real estate(CRE).Not only have asset prices declined,but the substantial increase in the cost of financing has also slowed transactions activity.Moreover,negative sentiment in the press,in our view,downplays the

4、 opportunity in key segments of the market and does not reflect the whole of what is happening in the sector.Specifically,certain challenged office is indeed a part of CRE that is in distress due to structural changes in the way office space is used following the Covid-19 pandemic.But,apart from off

5、ice,sectors such as industrial,multifamily,and others are showing resilient fundamentals.Additionally,secular trends continue to carry on for some traditional and specialized sectors.In other words,it is key,in our view,to not equate CRE as a whole to whats happening specifically in the office space

6、.CRE is a highly diverse asset class,comprising of other traditional sectors such as multifamily,industrial,retail,and hotels.It also includes sub-sectors(e.g.,student housing,cold storage,self storage,and data centers)that arise from traditional sectors due to changes in needs,advances in technolog