{"id":1004579337,"date":"2022-05-05T10:54:14","date_gmt":"2022-05-05T18:54:14","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004579337"},"modified":"2022-12-08T19:09:46","modified_gmt":"2022-12-09T03:09:46","slug":"latest-interest-rate-hike-points-to-mixed-impact-for-cre","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/latest-interest-rate-hike-points-to-mixed-impact-for-cre\/","title":{"rendered":"Latest Interest Rate Hike Points to Mixed Impact for CRE"},"content":{"rendered":"
\"\"<\/a>

Federal Reserve chair Jerome Powell addresses press conference following FOMC meeting May 4. Photo courtesy of the Federal Reserve via Flickr<\/p><\/div>\n

The Federal Reserve<\/strong> is a long way from done with raising interest rates, and the impact on the economy as well as on commercial real estate may unfold throughout the year.<\/p>\n

That was the initial feedback from analysts as the commercial real estate industry took stock of the central bank\u2019s second hike in less than two months. On Wednesday, the Federal Open Market Committee (FOMC) voted for the first 50-basis-point increase since 2000. The step marks the Fed\u2019s latest bid to fight inflation and follows the 25-basis-point hike<\/a> announced on March 16.<\/p>\n

Some leading commercial real estate economists say that the rate hikes will not have a major immediate effect on the health of the industry, despite the possibility of dampening economic growth in general.<\/p>\n

\u201cOutside of the office sector, which is lagging behind as employers allow increased remote work flexibility to keep and attract talent, commercial real estate continues to strengthen,\u201d said Lawrence Yun, chief economist at the National Association of Realtors<\/strong>.<\/p>\n

\u201cThe industrial sector is booming, retail is turning positive, the hotel industry is recovering, apartments are doing very well, and rents are rising in all commercial sectors,\u201d Yun added, speaking Wednesday at NAR\u2019s Commercial Economic Issues and Trends Forum in National Harbor, Md. Industrial rents are poised to keep rising during the next two years, and some midsize office markets are showing improvement as occupants seek alternatives to big cities, he predicted.<\/p>\n

Risks and silver linings<\/h2>\n

Nevertheless, rising rates could prove to be a drag on overall economic growth, \u201cwhich may result in some companies reducing their projections for future office space needs.\u201d That was the assessment of Trepp<\/strong>\u2019s Julianne Cavaliere, writing last week in the firm\u2019s three-part series <\/a> on interest rates and commercial real estate. \u201cWith that in mind, landlords may be more willing to lock in tenants at their current rates rather than risk losing them.\u201d<\/p>\n

Rising rates could also spell challenges for office finance. Trepp estimates that refinancing volume for office CMBS could reach $10.3 billion this year.<\/p>\n

Despite the prospect of higher financing costs, a silver lining to the projected series of rate hikes is that capital sources will be even more willing to lend, Cavaliere noted: \u201cUltimately there may be some near-term volatility in 2022 seen across all sectors of CRE, but \u2026 higher rates will attract capital later in the year and beyond,\u201d Cavaliere noted.<\/p>\n

The Fed also reinforced broad speculation that further hikes are likely in coming months. FOMC is \u201cprepared to adjust the stance of monetary policy as appropriate\u201d if it identifies hurdles to its twin goals of maximum employment and 2 percent inflation,\u201d the Fed said in a statement announcing the increase.<\/p>\n

Experts offered various predictions about the extent of those increases. \u201cWe are far from done (with rate hikes) at this point,\u201d said Mike Fratantoni, senior vice president & chief economist at the Mortgage Bankers Association<\/strong>. MBA\u2019s forecast is that the Fed Funds rate will reach 2.5 percent\u2014the neutral rate\u2014by the end of this year.<\/p>\n

In a research note published Wednesday, ING Group<\/strong> estimates that the the baseline rate will reach 3.25 percent because of inflation that is proving \u201cfar stickier than in recent cycles.\u201d Researchers from the financial services company said that they could not rule out a 75 percent basis point increase in June.<\/p>\n

\u201cWe then expect a further 50-basis-point hike in July before the Bank moves to 25-basis-point increments at the final three meetings of 2022 as quantitative tightening gets up to speed and contributes to the tighter monetary conditions,\u201d the researchers wrote.<\/p>\n","protected":false},"excerpt":{"rendered":"

Analysts weigh in on the Federal Reserve\u2019s biggest increase in two decades.<\/p>\n","protected":false},"author":2492,"featured_media":1004579339,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21825,22251,21783,21742],"tags":[35492,33179,38236,34040,33572,35305],"class_list":["post-1004579337","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","category-in-focus","category-investment","category-latest","tag-federal-reserve","tag-fomc","tag-lawrence-yun","tag-mortgage-bankers-association","tag-national-association-of-realtors","tag-trepp-inc"],"acf":[],"yoast_head":"\nLatest Interest Rate Hike Points to Mixed Impact for CRE - Commercial Property Executive<\/title>\n<meta name=\"description\" content=\"The Federal Reserve approves the largest interest rate increase since 2000, and experts assess the impact on commercial real estate.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/latest-interest-rate-hike-points-to-mixed-impact-for-cre\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Latest Interest Rate Hike Points to Mixed Impact for CRE\" \/>\n<meta property=\"og:description\" content=\"The Federal Reserve approves the largest interest rate increase since 2000, and experts assess the impact on commercial real estate.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/latest-interest-rate-hike-points-to-mixed-impact-for-cre\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2022-05-05T18:54:14+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-09T03:09:46+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2022\/05\/Federal-Reserve-HQ-file-photo_courtesy-of-Federal-Reserve-via-Flickr.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1600\" \/>\n\t<meta property=\"og:image:height\" content=\"1200\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Paul Rosta\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/latest-interest-rate-hike-points-to-mixed-impact-for-cre\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/latest-interest-rate-hike-points-to-mixed-impact-for-cre\/\",\"name\":\"Latest Interest Rate Hike Points to Mixed Impact for CRE - Commercial Property Executive\",\"isPartOf\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/latest-interest-rate-hike-points-to-mixed-impact-for-cre\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/latest-interest-rate-hike-points-to-mixed-impact-for-cre\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2022\/05\/Federal-Reserve-HQ-file-photo_courtesy-of-Federal-Reserve-via-Flickr.jpg\",\"datePublished\":\"2022-05-05T18:54:14+00:00\",\"dateModified\":\"2022-12-09T03:09:46+00:00\",\"author\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/8a20daa0b84c48fd50a4e5d4e8171727\"},\"description\":\"The Federal Reserve approves the largest interest rate increase since 2000, and experts assess the impact on commercial real estate.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/latest-interest-rate-hike-points-to-mixed-impact-for-cre\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.commercialsearch.com\/news\/latest-interest-rate-hike-points-to-mixed-impact-for-cre\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/latest-interest-rate-hike-points-to-mixed-impact-for-cre\/#primaryimage\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2022\/05\/Federal-Reserve-HQ-file-photo_courtesy-of-Federal-Reserve-via-Flickr.jpg\",\"contentUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2022\/05\/Federal-Reserve-HQ-file-photo_courtesy-of-Federal-Reserve-via-Flickr.jpg\",\"width\":1600,\"height\":1200,\"caption\":\"Federal Reserve headquarters, Washington, D.C. Photo courtesy of the Federal Reserve Bank via Flickr\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/latest-interest-rate-hike-points-to-mixed-impact-for-cre\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.commercialsearch.com\/news\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Latest Interest Rate Hike Points to Mixed Impact for CRE\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#website\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/\",\"name\":\"Commercial Property Executive\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.commercialsearch.com\/news\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/8a20daa0b84c48fd50a4e5d4e8171727\",\"name\":\"Paul Rosta\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/327e3575caef617e520deffcb584f4eb5c37029978e176baf3a1de3f8106fffc?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/327e3575caef617e520deffcb584f4eb5c37029978e176baf3a1de3f8106fffc?s=96&d=mm&r=g\",\"caption\":\"Paul Rosta\"},\"url\":\"https:\/\/www.commercialsearch.com\/news\/author\/rostapaul\/\"}]}<\/script>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Latest Interest Rate Hike Points to Mixed Impact for CRE - Commercial Property Executive","description":"The Federal Reserve approves the largest interest rate increase since 2000, and experts assess the impact on commercial real estate.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.commercialsearch.com\/news\/latest-interest-rate-hike-points-to-mixed-impact-for-cre\/","og_locale":"en_US","og_type":"article","og_title":"Latest Interest Rate Hike Points to Mixed Impact for CRE","og_description":"The Federal Reserve approves the largest interest rate increase since 2000, and experts assess the impact on commercial real estate.","og_url":"https:\/\/www.commercialsearch.com\/news\/latest-interest-rate-hike-points-to-mixed-impact-for-cre\/","og_site_name":"Commercial Property Executive","article_publisher":"https:\/\/www.facebook.com\/CPExecutive","article_published_time":"2022-05-05T18:54:14+00:00","article_modified_time":"2022-12-09T03:09:46+00:00","og_image":[{"width":1600,"height":1200,"url":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2022\/05\/Federal-Reserve-HQ-file-photo_courtesy-of-Federal-Reserve-via-Flickr.jpg","type":"image\/jpeg"}],"author":"Paul Rosta","twitter_card":"summary_large_image","twitter_creator":"@cpexecutive","twitter_site":"@cpexecutive","schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.commercialsearch.com\/news\/latest-interest-rate-hike-points-to-mixed-impact-for-cre\/","url":"https:\/\/www.commercialsearch.com\/news\/latest-interest-rate-hike-points-to-mixed-impact-for-cre\/","name":"Latest Interest Rate Hike Points to Mixed Impact for CRE - Commercial Property Executive","isPartOf":{"@id":"https:\/\/www.commercialsearch.com\/news\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.commercialsearch.com\/news\/latest-interest-rate-hike-points-to-mixed-impact-for-cre\/#primaryimage"},"image":{"@id":"https:\/\/www.commercialsearch.com\/news\/latest-interest-rate-hike-points-to-mixed-impact-for-cre\/#primaryimage"},"thumbnailUrl":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2022\/05\/Federal-Reserve-HQ-file-photo_courtesy-of-Federal-Reserve-via-Flickr.jpg","datePublished":"2022-05-05T18:54:14+00:00","dateModified":"2022-12-09T03:09:46+00:00","author":{"@id":"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/8a20daa0b84c48fd50a4e5d4e8171727"},"description":"The Federal Reserve approves the largest interest rate increase since 2000, and experts assess the impact on commercial real estate.","breadcrumb":{"@id":"https:\/\/www.commercialsearch.com\/news\/latest-interest-rate-hike-points-to-mixed-impact-for-cre\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.commercialsearch.com\/news\/latest-interest-rate-hike-points-to-mixed-impact-for-cre\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.commercialsearch.com\/news\/latest-interest-rate-hike-points-to-mixed-impact-for-cre\/#primaryimage","url":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2022\/05\/Federal-Reserve-HQ-file-photo_courtesy-of-Federal-Reserve-via-Flickr.jpg","contentUrl":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2022\/05\/Federal-Reserve-HQ-file-photo_courtesy-of-Federal-Reserve-via-Flickr.jpg","width":1600,"height":1200,"caption":"Federal Reserve headquarters, Washington, D.C. Photo courtesy of the Federal Reserve Bank via Flickr"},{"@type":"BreadcrumbList","@id":"https:\/\/www.commercialsearch.com\/news\/latest-interest-rate-hike-points-to-mixed-impact-for-cre\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.commercialsearch.com\/news\/"},{"@type":"ListItem","position":2,"name":"Latest Interest Rate Hike Points to Mixed Impact for CRE"}]},{"@type":"WebSite","@id":"https:\/\/www.commercialsearch.com\/news\/#website","url":"https:\/\/www.commercialsearch.com\/news\/","name":"Commercial Property Executive","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.commercialsearch.com\/news\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/8a20daa0b84c48fd50a4e5d4e8171727","name":"Paul Rosta","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/327e3575caef617e520deffcb584f4eb5c37029978e176baf3a1de3f8106fffc?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/327e3575caef617e520deffcb584f4eb5c37029978e176baf3a1de3f8106fffc?s=96&d=mm&r=g","caption":"Paul Rosta"},"url":"https:\/\/www.commercialsearch.com\/news\/author\/rostapaul\/"}]}},"jetpack_featured_media_url":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2022\/05\/Federal-Reserve-HQ-file-photo_courtesy-of-Federal-Reserve-via-Flickr.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts\/1004579337","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/users\/2492"}],"replies":[{"embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/comments?post=1004579337"}],"version-history":[{"count":10,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts\/1004579337\/revisions"}],"predecessor-version":[{"id":1004579647,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts\/1004579337\/revisions\/1004579647"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/media\/1004579339"}],"wp:attachment":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/media?parent=1004579337"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/categories?post=1004579337"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/tags?post=1004579337"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}