Five Significant Challenges Facing CRE
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
