ATLANTA—What's in store for the capital markets in 2018? With one quarter nearly behind us, where do we go from here? GlobeSt.com caught up with Gary Bechtel, president of Money360, to get some insights in this exclusive interview.
1. Sales Volume Will Not Slow Due to Rates
“Growth in commercial real estate rental and occupancy rates will be driven by interest rates remaining at near historic lows and the economy continuing to improve,” Bechtel tells GlobeSt.com. “But what I think is notable about 2018 is I don't expect any upward impact on capitalization rates slowing sales volume.”
That's good news for condo developers that are still breaking ground or halfway through construction. This also speaks to the continued the health of the market at this later stage in the cycle.
2. Investors Are Getting Aggressive
It's getting competitive out there in core markets. With some property owners holding out for top dollar at the extreme high of the market, prices may inch up.
“Investors are being aggressive about commercial real estate,” Bechtel says. “With the tremendous amount of capital on the sidelines ready to take advantage of buying opportunities for higher quality properties, I expect to see a lot of activity.”
3. Liquidity Will Remain Healthy
In more good news, Bechtel says it's good time to be a borrower. “Non-bank lenders are providing increasing amounts of liquidity to the markets, filling the void left by traditional capital providers that face regulatory and other limitations,” he says. “I expect new entrants into the debt markets as yield targets adjust and firms transition from other assets into commercial real estate lending.”
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