Interest Rates Impact on Commercial Real Estate (including a free chart)

It's hard to deny there's been some significant downward pressure on commercial and industrial real estate values.

But instead of looking at it subjectively, I put together a chart which shows how cap rates need to adjust in response to borrowers needing to hit DSCR requirements under different rate scenarios.

Not all buyers will require financing, and others might be able to come up with creative financing techniques, but this chart illustrates the impact rising interest rates have had on a good portion of the investment community.

I spent a couple minutes explaining how I made the chart so just go to 3:01 if you want to skip that part.

Timestamps:

0:00 - Introduction
0:49 - How I made the chart
3:01 - Reading the chart

You can download the chart for free here:

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🙋‍♂️ Chad Griffiths, MBA, SIOR


#industrialize #industrialinsiders #industrialrealestate

[industrialize]

What actually is a cap rate anyways?

[RealFindsPod]

Stinks for owners, but for cash buyers, it is a heck of lot of opportunity!

[vishalmahavratayajula]

I am bullish on the CRE, especially considering the volume of young investors, the immigrants investing here in housing regardless of interest rates, the projects that are already taken up by property developers, the commitments investors already made in REITs. Also, a house to asians from their thought process is a must have and crucial part of their “ultimate settlement”. There has been growth in asian population where their fundamental settlement aspect is an “own house”