As Interest Rates Get Set To Rise, CRE Pinpoints Its Threshold For Pain
WASHINGTON, DC–The commercial real estate market, long awaiting the gradual-but-steady increases in the federal funds rate, has had plenty of time to think about how high will be too high for a rate increase. According to Seyfarth Shaw’s newly-released 3rd annual Real Estate Market Sentiment Survey, that threshold is a 51 to 150 basis point increase — and then there will be a material adverse impact on the commercial real estate market. That was according to 36% of the respondents. Another 27% had a higher pain tolerance and settled on a basis point increase of up to 150, Ron Gart, a partner in the firm’s Washington, DC office, tells GlobeSt.com. “It is no more than 150 basis points,” he said, and then most of the respondents agree that the pain will set in.