Dan Trebil shares insights in REJournals regarding interest rates and the path forward for investors
MINNEAPOLIS, MINNESOTA (July 11, 2022) - Dan Trebil, managing director of Northmarq's Minneapolis debt/equity team, addressed the Federal Reserve's recent interest rate raise, the agency's most aggressive hike since 1994, in the most recent edition of REJournals. The story notes that while the Fed's decision was designed to address inflation, it raised concerns for commercial real estate professionals about what lies ahead.
Trebil provided a nuanced view of the CRE industry's potential response, highlighting that CRE boasts some advantages that should help keep the deals and financing requests flowing, even with higher interest rates. In short, investors still require a place to put their money and commercial real estate remains a favored investment type.
“The good news is, there is still a lot of money out there,” Trebil said. “Real estate fundamentals are still good. People’s properties are still operating well. A quick run-up in interest rates like this has put the brakes on some refinances that might have made sense before but don’t make sense now. But there is still demand for commercial real estate.”
Trebil, though, is realistic. He says that the rising rates have caused some investors who were ready to acquire new properties to pause their plans. These investors are waiting to see the full impact higher interest rates might have on commercial real estate.
“There is a price discovery going on now between buyers and sellers, and lenders, too, on where to price debt now that rates have risen,” Trebil said.