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What About Inflation Risk?

Looking over the horizon, it may be prudent to consider how high inflation may impact your commercial real estate investing.

By Dan Pryor | Updated on October 31, 2011

Economists of all stripes agree that a long sustained period of inflation is caused by money supply growing faster than the rate of economic growth.  Given QE2, the unfathomable amount of US government debt (inclusive of Social Security obligations), and lack of job growth, how, one might ask, can we not anticipate runaway inflation in the United States?

Yet, the expected inflation rate is remaining low by historical standards. Investors are not seeing inflation risk, at least as evidenced in the capital markets’ pricing of Treasuries.

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