CALABASAS, CA—The Federal Reserve's quarter-point increase in the federal funds rate, its first since 2006, is likely to benefit commercial real estate investors, Marcus & Millichap says in a Research Blog. That's due more to the message the rate increase sends than the influence of the rate increase itself.

By raising the rate for the first time in nearly a decade, "the Fed has finally expressed its confidence in economic growth, potentially opening the door to increased consumption and business investment," writes Hessam Nadji, senior EVP at MMI."These positive trends would benefit all commercial real estate sectors as household formations escalate and increased discretionary income supports demand for housing, retail goods and business services."

In particular, according to the GlobeSt.com Thought Leader, the speed and strength of economic growth that persuaded the nation's central bank to finally act bodes well for office, and industrial properties will also benefit from this trend. "Additional hiring will generate new office space demand and put downward pressure on vacancy," according to Nadji. In addition, "incremental demand may also emerge in interest-rate-sensitive financial services businesses, contributing to a projected decrease in the US vacancy rate next year."

In the industrial sector, Nadji observes, "a more robust pace of economic growth stemming from higher consumption will stimulate additional space demand from retailers." Conversely, the rate increase is likely to further strengthen the dollar, restraining US companies with significant export business.

Nadji also discusses the rate increase's implications for the multifamily sector as well as the context for the Fed's historic action. For the full Research Blog, click here. For all coverage of Marcus & Millichap on GlobeSt.com, including columns and insights from Hessam Nadji, click here.