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| John Oharenko |
Chicago, IL -- With inflation progressing slightly above the 2%-mark and the
domestic economy showing uninterrupted growth, the Fed is expected to raise rates
one or two more times by yearend.
That said, benchmark 10-year treasuries are
stubbornly low, at levels consistent with late spring/early summer.
Mortgage spreads are also flat, translating to
interest rates typically in the
lower 4% range for floating-rate loans, and approximately 4.5%-to-5% for
fixed-rate debt.
With mortgage rates predicted to
reach higher levels combined with ongoing new construction supply, buyers
take a cautionary wait-and-see attitude towards select multifamily,
lodging and industrial deals.
The retail property sector still is
bargain-hunter's turf, while office deals remain
selectively targeted. As a
rule, infill deals of various property types are in highest demand, while
value-pricing typifies suburban assets.
As investors get a better grip on
supply/demand dynamics and interest rates,pricing uncertainty
prevails. As such, fresh acquisition financing activity
is limited, and refinancing and
takeout loans represent the bulk of debt volume.
John Oharenko, executive director
of The Real Estate Capital Institute's(r), suggests, "As summer ends,
expect more pricing discovery for both debt and
equity deals. More
attractive pricing may be on the horizon for patient investors."
The Real Estate Capital
Institute(r) is a volunteer-based research organization that tracks realty
rates data for debt and equity yields. The Institute posts daily and
historical benchmark rates including treasuries, bank prime and LIBOR.
Contact:
John Oharenko, Executive
Director
The Real Estate Capital Institute(r)
3517 West Arthington Street
Chicago, Illinois USA 60624
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