Strong Fundamentals in Commercial Real Estate

On the other hand, there is still some market uncertainty amid concerns over the ongoing trade war with China, a slowdown in business investment, and the recent formal impeachment inquiry in Washington, D.C.

The positive arbitrage between cap rates and the cost of capital remains compelling for most real estate asset classes. And these investments also provide an inflation hedge along with stable, long-term cash flow. Meanwhile, socio-demographic trends continue to favor real estate. Multifamily and Seniors Housing, for example, will continue to get a boost from an aging population and the tendency of millennials to rent rather than own. And, industrial properties continue to benefit from the growing levels of e-commerce.

In short, don’t overreact positively or negatively to the daily barrage of uncertainty in the media. Take advantage of the market opportunity and talk with your lending professional about shifting into loans with longer maturities and non-recourse provisions. At today’s rates, this could provide a substantial cushion to protect you from any downside risk and keep you well-positioned for the future.