The Federal Reserve is saying that it will start to taper off its purchases of $120 billion of bonds per month. Also, Fed officials were split 50-50 on an interest rate hike in 2022 according to Oxford Economics, calling the meeting "slightly more hawkish."
But what does that mean for commercial real estate? One of those good and bad news scenarios.
"The tapering of bond purchases could result in a selloff of Treasuries," David Pascale, senior vice president at George Smith Partners, tells GlobeSt.com. "This could increase interest rates for virtually all CRE permanent loans, which are typically priced over the 10-Year Treasury. Higher rates could lead to higher cap rates and therefore lower values for CRE assets nationwide."
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
