What the 5th Fed Rate Increase Means for Investors
How FED Rate Hike Impacts the Commercial real estate outlook
Takeaways From September Fed Meeting
The Fed reiterated its commitment to preserving stable prices and moving inflation back to 2.0%
They raised interest rates 75 basis points, projected another 125-basis point rise before the end of 2022
Indicated a 4.4% unemployment rate may be needed to balance the labor market and control inflation
Why Rising Rates Matter For Investors
Rising capital costs are squeezing levered yields; buyer underwriting becoming increasingly conservative
As market recalibrates sellers must review market pricing to align with buyer expectations
How This Impacts Commercial Real Estate Transactions
Expectation gap emerging between buyers and sellers
Recalibration of the transaction market is needed for buyers and sellers to reach market clearing sales prices
*Through September 22
Includes apartment, retail, office, and industrial sales $1 million and greater
Sources: Marcus & Millichap Research Services, CoStar Group, Inc., Real Capital Analytics, Federal Reserve
