According to global real estate advisor CBRE, the impact on U.S. commercial real estate investment activity from the recent rise in the 10-year Treasury will be minimal in the short-term.
Spencer Levy, CBRE's Senior Economic Advisor and Head of Research, the Americas, commented, "Geographic markets with the greatest rent growth will be most resilient in the face of rising interest rates. Industrial, with the strongest investor demand, will be generally more resilient than other asset types. Retail showed the greatest weakness in cap rates in 2017, even before interest rates began to rise. Recent interest rate increases may cause cap rate expansion in retail to accelerate for secondary/weaker assets."
Levy further stated, "Secular factors, particularly the strength of equity capital flows, have upended the historic relationship between interest rates and cap rates. For foreign capital flows, the fall in the dollar is a big offset to rising interest rates."
A total of 161,875 U.S. properties with a foreclosure filing during the first quarter of 2019, down 23 percent from the previous quarter and down 15 percent from a year ago to the lowest level since Q1 2008.
According to the Mortgage Bankers Association's latest Commercial and Multifamily Mortgage Debt Outstanding quarterly report for 2018, the level of commercial and multifamily mortgage debt outstanding in the U.S. at the end of 2018 was $216 billion (6.8 percent) higher than at the end of 2017.
According to the latest National Association of Home Builders/Wells Fargo Housing Market Index, U.S. builder confidence in the market for newly-built single-family homes held steady at 62 in March 2019.
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