"For the last three years, commercial real estate pricing had stalled, increasing at about 2.1% per year through April 2019, according to a new letter from UCLA Anderson Forecast and the UCLA Ziman Center for Real Estate. However, a recent reverse in interest rates could actually fuel commercial real estate pricing in the near term. The Fed is expected to reverse its quantitative tightening policy and decrease rates in July, and the 10-Year Treasury rate has dropped in response to fear of a recession. The event could shift cap rate and pricing expectations through the end of the year.
"'Prices plateaued because interest rates were going up, but because of the recent drop in the 10-Year Treasury, prices might pick up in the near term. I am not as pessimistic as I was before,' David Shulman, senior economist for the Ziman Center and UCLA Anderson Forecast and the author of the recent letter The Good, The Bad and The Ugly, tells GlobeSt.com."
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