Category: Credit, Real Estate, Think Tank

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

One Response to “Commercial Real Estate and Low Interest Rates”

  1. Giovanni says:

    When the authors state that 10yr TIPS are the appropriate benchmark for cap rates I think they are missing a very important point. While spreads are at or above previous records, the most important consideration is what’s the exit cap rate? The TIPS spread can be a useful indicator but you make your money in real estate when you buy it and that means buying it below what you can sell it for later. At least in the coastal institutional markets if you’re buying at a 4-1/2-5% cap rate today what cap rate do you plan to sell at?

    Now of course we could turn out to be the next Japan and the Fed will be stuck holding interest rates at zero for decades but how many millions do you want to bet on that?