Global Real Estate Investment Funds Leader with Ernst & Young Mark Grinis joins The Commercial Real Estate Show to discuss E&Y’s Global Market Outlook, including the impact that rising interest rates might have on commercial real estate. Some highlights include:
- At inauguration markets moved, including an increase in 10 year rates, but this has dropped back
- Central bank balance sheet has moved from around $2 trillion before the financial crisis to $12 trillion today
- How this will unwind remains to be seen
- Believes Fed should be able to manage a stable recovery
- Believes interest rates and cap rates will run into a headwind now
- Expects rates to be 125 basis points higher in 2019
- Nearing full employment
- Rate increases not directly correlated to cap rates and prices, but are related
- Thinks higher anticipated cap rates are having an effect on transactions already