IRVINE, CA—With capitalization at historical lows, there is little to no room for more compression and a much stronger likelihood that cap rates will move in a similar direction to interest rates, Faris Lee Investments' president and CEO Rick Chichester tells GlobeSt.com. As we forge ahead into 2017, we spoke with Chichester about the “Trump Bump” and rising interest rates and how they will affect commercial real estate values in 2017. (Note: Faris Lee's senior managing partner Don MacLellan and senior managing director Patrick Toomey and Michael Cohen, president of M.A. Cohen & Co., also contributed to this story.)

GlobeSt.com: What are the implications for CRE values in 2017 given current influencing factors?

Chichester: We are in the mature phase of the business cycle, at approximately 90 months in duration–the fourth-longest expansion in US history. Commercial real estate has enjoyed significant recovery and appreciation over this period due to both sustained, moderate growth and the historically low rates as provided by the aggressive monetary policies of the Federal Reserve. Today, much of the commercial real estate sector is “fully priced” and, in some cases, at risk of pushing into the territory of unsupported asset inflation. The fundamentals of real estate have always been critical, but it is also important to understand that its domain is broad and inclusive of economic, social and political influences as well, with no single factor existing in isolation of the others.