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TH Real Estate research examines the impact of rising US interest rates on commercial real estate

With prevailing sentiment that the US Federal Open Market Committee will raise short-term interest rates on Wednesday 15 March (the Fed’s third 0.25% rate hike since December 2015 and the first of three expected in 2017), real estate investors may question whether higher rates could undermine property values and operating income by raising discount rates and slowing the economy. In particular, concerns are rooted in the assumption that rising rates mean higher cap rates, which in turn can weaken property values and commercial real estate (CRE) investment performance.However, research out today from TH Real Estate examines historical returns which show that rising interest rates have not automatically resulted in lower real estate values o...[…]