Article originally posted on Fairview Lending
Commercial real estate is showing the first signs of cooling in more than a year, disrupted by rising interest rates that are already causing some deals to collapse. What is causing the quick change in fortunes in commercial real estate? How will the recent fed raise impact prices? What property types or more at risk and which ones will hold up better?
What was in the data on commercial property sales
Property sales were $39.4 billion in April, which was down 16% compared with the same month a year ago, according to MSCI Real Assets.
Now, some analysts are starting to ask whether the rally is running out of steam. Hotels, office buildings, senior housing and industrial properties recorded big drops in sales last month.
“The speed of that transition is shocking,” said Jim Costello, chief economist at MSCI Real Assets. A drop in sales can be an early indicator of stress in real-estate markets because prices are usually slower to change, he added.