Commercial Real Estate Prices to Decline

The Federal Reserve’s interest-rate hike for the first time in nearly a decade has ensured that values are not likely to climb in the new year. For commercial real estate investors, this means the good times may be over, reports Bloomberg. 2015 saw a surge in sales and acquisitions of major properties, with U.S. commercial real estate transactions reaching $546 billion this year, climbing from $432 billion in 2014. While raised interest rates may not necessarily mean lower property values, as rising rents and an improving economy can justify higher prices even if borrowing costs increase. Even so, the pace of price appreciation has started to slow. Green Street Advisors LLC predicts that commercial property prices will decline about 5 percent next year. For more, click here.