Rising interest rates and increasing construction costs are the biggest threats to the commercial real estate sector, according to a new report by industry data provider, LightBox.
The 18-page ‘Investor Sentiment Report’, covering data during the first quarter this year, said record high inflation and the prospect of higher interest rates were “tangible threats” that were causing investors to revise profit expectations.
Interest rates for a 30-year fixed mortgage rose from around 3.40% at the beginning of the year to 4.73% at the end of March, while jumbo loans saw rates jump from 3.35% to 4.45% during the same period.
Photo by Karolina Grabowska