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CRE Industry Reacts to Another Fed Rate Hike

National Real Estate Investor (December 14, 2017) – If the Fed continues with the rate hikes in 2018, cap rate spreads may compress somewhat, according to Chris Muoio, senior quantitative strategist with online real estate marketplace Ten-X.

Despite the increase, interest rates are still low and there is an expectation that in the near term, rates will remain manageable, says K.C. Sanjay, senior real estate economist for Axiometrics, a RealPage company which provides apartment and student housing market intelligence. “The bump in rates is no surprise and already has been built into deals that are in process,” Sanjay says. Over the year, multifamily investors and REITs may see moderating total returns—not because of a rise in interest rates, but because of the more competitive environment in market fundamentals, he adds.

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