The Federal Reserve Board’s 25-basis-point increase today will not have a significant impact on commercial real estate (“CRE”). Today’s increase could signal a slight weakening of investor demand for CRE, as lower risk investments like treasury bonds begin to look more attractive. However, other reasons suggest CRE prices and returns will continue to be attractive, even in a rising interest rate environment, including: (1) inflation, as a major driver of longer-term yields, is expected ...
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