REOC San Antonio
Commercial Real Estate Since 1974   
Kim_Gatley
Kim Gatley
S
enior Vice President & Director of Research at REOC San Antonio

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Rising Interest Rates’ Effect on CRE

In June 2022, the Fed increased interest rates by 75 basis points – its largest move since 1994, noting that inflation is the highest it’s been since the early 1980s.  The target federal funds range 1.5% to 1.75%, and the Fed anticipates more increases.

By gradually raising rates, the Fed is trying to get a handle on inflation and slowly pull some of the excess liquidity out of the economy.

While inflation is at 40-year highs, interest rates are nowhere near 2000’s 6.5%, much less the record high of nearly 20% in 1980.

Taking out a loan to purchase or refinancing commercial property may still be a smart move; however, look at more than interest rates.  Consider supply/demand shifts, local market dynamics and financing structure.

Read entire article: What interest rate hikes mean for multifamily property investors (JP Morgan Chase, 6.24.22)

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