Rising interest rates has investors questioning if cap rates will rise too
Interest rates and cap rates are not directly linked
Historically there are periods when borrowing costs rise while cap rates fall and vice versa
Factors driving cap rate compression unrelated to interest rates:
Elevated liquidity and lower global returns -> Hunt for yield
Stock market volatility could push investors elsewhere
Upside potential for some segments of CRE drawing new capital
Focus should be on long-term demographics and the future of commercial real estate
Some modest upward pressure could be seen in some markets and property types, but unlikely to see broad-based increases
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