HOW HEIGHTENED INTEREST RATES HAVE IMPACTED CRE MARKETS
Fed Pauses Rate Increases, Market Still In Discovery
- The Fed chose to keep the federal funds rate flat at the June 14th meeting
- A reprieve from rate hikes promotes stability, but markets are still adapting to higher interest rate climate
Cost of Capital Restraining Debt Markets
- The clearest effect of higher interest rates is a significant rise in the cost of financing on CRE deals
- Premiums on borrowing and tighter lending standards are creating distress risk among underperforming assets
What Will Re-Invigorate CRE Markets?
- Interest rate stability could initiate the reconciliation of the buyer-seller expectation gap
- The interest rate driven market disruption could create opportunities for well-positioned CRE investors
*Through June 14
Sources: Marcus & Millichap Research Services, BLS
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