Rising Interest Rates Have Yet to Curb Record Demand and Pricing
“Writing on the Wall?”
The 25 and 50 basis point increases by the Federal Reserve in March and May along with the June 16th three quarter (3/4) point additional bump has increased our client’s cost to borrow money by over 1% but surprisingly has not curbed their enthusiasm to purchase commercial real estate as rates still remain near historic lows.
The shortage of available buildings and the prohibitive costs, timing, and hassle to build new continues to drive users and investors to chase what little product is on the market resulting in continued record pricing. This was demonstrated when Hilliker agents recently sold the Hanley Center and the Kirkwood Texas Roadhouse at substantially above full market asking prices (see details of these sales below)
A similar trend has been seen by our agents at Westwood Net Lease Advisors where current record asking prices for investment properties remain. “While we are still seeing record low cap rates, we are starting to see more flexibility from Sellers negotiating down from their asking prices.” said Jason Simon Vice President at Westwood. Feel free to call Jason for more details regarding potential investment properties. 314-563-2206.