Day: May 18, 2022

Unless you’ve been hiding under a rock for most of 2022, you know that interest rates are on the rise. The best barometers for commercial real estate interest rates are US Treasuries and LIBOR/SOFR. They are the indices most lenders use to price their loans. Since December 2021, the 10-Year benchmark index has risen over 150 basis points to 2.96% as of May 17, 2022. To be sure, this more than doubling of treasury rates over five months has led to disruption in the market and caused lenders to revisit…

In an environment with rising interest rates and inflation, the U.S. real estate market should prove resilient in sectors with pricing power, strong demand and shorter lease terms, which, have historically performed well. Real estate is an ideal place to park capital in stagflation environments, except where markets are oversupplied and lose pricing power. Fortunately, the self storage sector isn’t oversupplied. Development activity in 2021 for self storage fell from activity levels in 2019, with $3.5 billion versus 2019’s $5.0 billion. REITs do not anticipate significant supply challenges this year.…