We usually think of capital as something which has value. Traditionally we have defined that value by the willingness of borrowers to pay interest and by the returns which investors see as acceptable. But now we have a new consideration.
Current real estate interest rates are in free-fall, now at depths never seen in the US. We can blame the COVID-19 pandemic in part for today’s ultra-low interest rates, but the reality is that rates have largely been in decline since the 1980s. It hasn’t been a straight line down, but the general trend has been lower and lower rates over time.
Inflation is the economic worry of the moment, a headache that could affect commercial real estate over the coming months. But should CRE actually be seen as a hedge against inflation?
From “phygital” to fulfillment, industrial to ESG, there’s an evolutionary resurgence in retail that presents new opportunities for innovative commercial real estate companies.
As 2023 approaches, the big question for commercial real estate (CRE) is what happens next. We’re leaving the world of pandemic economics behind — along with a series of shifts and spikes no one had fully anticipated. The most basic issue for the coming year concerns the value of money. Will the inflationary spike that began in 2022 continue into the coming year and beyond? And what does it mean for CRE?