Commercial real estate investors in the U.S. are feeling more confident this week after the Federal Reserves' fourth interest rate hike in 2018, according to global real estate consultant CBRE.
CBRE's Chairman, Americas Research and Senior Economic Advisor Spencer Levy explains the impact of yesterday's rise in the 10-year Treasury on commercial real estate investment activity with the following comments:
"The outlook for cap rates in 2019 remains favorable, as debt and equity markets are highly liquid and commercial real estate fundamentals are good (retail, office, multifamily) to strong (industrial). The Fed's softening outlook should give confidence to investors, despite strong but slowing rent growth.
"Notwithstanding some late cycle concerns, the volatility in the stock and bond markets makes commercial real estate even more attractive as a long-term capital strategy and we expect the spread between bonds and cap rates to further compress if this volatility persists. As investors seek yield, U.S. commercial real estate will remain an attractive place to deploy capital."
According to Freddie Mac's latest Primary Mortgage Market Survey, the 30-year fixed-rate mortgage in the U.S. dropped 10 basis points to 4.31 percent. Mortgage rates declined decisively this week amid various market reports.
According to CBRE's latest U.S. Data Center Trends Report, demand from large cloud users drove U.S. data center leasing to record levels in 2018, providing momentum for new construction in the sector this year.
According to Freddie Mac's latest Primary Mortgage Market Survey, U.S. mortgage rates held steady in the last week of February, after declining for three consecutive weeks. Mortgage rates remained mostly unchanged this week.
According to the National Association of Realtors, existing-home sales in the U.S. experienced a dip for the third consecutive month in January 2019. Of the four major U.S. regions, only the Northeast saw an uptick in sales activity last month.
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