The Leading Law Firm In The Nation For ADA Legal Defense

Interest rates and commercial real estate

On Behalf of | Apr 10, 2017 | Commercial Real Estate |

California commercial real estate investors and developers might be aware that interest rates are rising and expected go up twice more before the end of 2017. This could create a slowdown in the sector because borrowing money will become more costly. On the other hand, the higher interest rates means a stronger economy, and this could be good for commercial real estate. Overall, property prices are expected to decrease as cap rates rise.

Business leaders report optimism about the economy although the head of the Federal Reserve says that economic growth is expected to be moderate in the next two years. Because of the expected increases in interest rates ahead, many borrowers may be eager to refinance. The last interest rate increase was 0.25 percent, and this brought interest rates up between 0.75 and 1 percent.

The Trump administration plans to minimize regulations, but it is not yet clear what effect this will have. It will still be necessary for financial institutions to manage risk regardless of what regulations may be in place.

Commercial real estate investors may want to work with an attorney through the process of purchasing, owning or selling property. An attorney may be able to assist with a variety of aspects of real estate purchase and management ranging from easements to tenant issues to zoning. Furthermore, even an experienced real estate investor may find that moving into a different sector presents different challenges. Therefore, for example, a person whose primary investments have been in office buildings but who is choosing to move into industrial property might want to discuss the specifics of that sector with an attorney.