Complications possible in CRE market

There are some issues involving the commercial real estate market.

The commercial real estate market may experience some issues regarding yield risks in the coming months, as interest rates start to climb, according to industry members interviewed by Bloomberg.

Many investors and property management companies benefited from the low rates this year, as it helped spike sales, considerably. Citing data from Real Capital Analytics, the news source noted the level of commercial real estate sales during the third quarter rose to $67 billion, which was 19 percent higher year-over-year.

However, with rising rates, activity may not be as strong. While some are worried, others already are prepared to adjust.

"Our investors are less interested than you might think in taking advantage of all the money they can borrow, and more interested in investing their cash," Rob Speyer, co-chief executive officer of Tishman Speyer, told the news source. "We know not everything goes as you plan."

Many investors decided to look at non-primary markets in order to avoid the potentially major issues with the larger markets, but conditions can change with political changes in those cities, one executive explained to the news source.

Share
Disclaimer: All data and information provided on this site is for informational purposes only. Zoliath.com makes no representations as to accuracy, completeness, correctness, suitability, or validity of any information on this site and will not be liable for any errors, omissions, opinions or delays in this information or any losses, injuries, or damages arising from its display or use. All information is provided on an as-is basis.