CBRE on the Threat Rising Interest Rates Could Pose to the Commercial Real Estate Boom
CNBC (YouTube Video)
January 28, 2022
With the Federal Reserve signaling a rise in interest rates beginning in March, what are real estate experts forecasting for demand for office, industrial, retail and multi-unit residential space? “Long-term, modestly rising interest rates and modestly rising inflation has actually been good for commercial real estate – both for rents and property values,” says Spencer Levy, Global Chief Client Officer at CBRE. Interest rates remain at historically low levels, which leaves room for three to four modest rate hikes – but not significantly more than that. Construction of new industrial facilities and multi-family housing is robust, while weaker demand for office and retail space has slowed development of new properties in those sectors. “One of the great things about the commercial real estate industry is that is it somewhat self-regulating with respect to the type of construction you’re seeing,” says Levy.
Watch the video here.