Rate Increases Top of Mind for CRE

Headquartered in Chicago, Seyfarth Shaw sees a “hawkish” attitude toward interest rates.

CHICAGO—Rising interest rates pose the biggest concern to commercial real estate executives in 2016, although supply/demand issues aren’t far behind. That’s the top-line finding of Seyfarth Shaw’s “2016 Real Estate Market Sentiment Survey,” which also found that CRE executives think one of their own would be the industry’s best bet among Presidential contenders.

In line with the concern over a rising-rate environment, nine out of 10 respondents to Seyfarth’s survey take a “hawkish” attitude, expecting the Federal Reserve to increase rates this year. Seventy-one percent of the “hawks” expect multiple rate increases, although just 2% predicted four or more hikes. That being the case, 43% of respondents said the industry could absorb an increase of 51 to 100 basis points before experiencing a material adverse impact.