CRE Demand Staying Strong

This is a great little article from summarizing a NAREIT (National Association of REITs) article on the strong demand for Commercial Real Estate assets. Even in the face of some rising rates and potentially slowing economy, interest is staying robust - even for retail, where construction has slowed and demand for space is absorbing vacancies. From the article: WASHINGTON, DC—A voracious appetite for commercial real estate demonstrates no signs of lessening as demand exceeded supply growth for retail, apartments and office markets, and was matched in industrial space. According to market commentary from NAREIT, vacancy rates declined in office and retail markets, slightly changed in industri

A 10-Year Review of Cap Rates vs Borrowing Costs

This is a very thorough report of the relationship over the past 10-years of commercial real estate capitalization rates and borrowing costs. Despite rising rates in the past 18 to 24 months, CRE cap rates have been stable or even declining. Why is this? Partly due to the fact that there are still limited opportunities for investors to find conservative, high-yielding investments in the market, and partly due to the fact that future interest rate increases are expected to be moderate to non-existent from this point. I also believe that the institutionalization of real estate as an alternative investment class has broadened its appeal and that, over time, the cap rates of diversified real est

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