WASHINGTON, DC—Talk about the irony of timing—or should that be the inescapable grip of market supply and demand? At any rate, on Wednesday the American Institute of Architects announced that the Architecture Billings Index reached its highest level since 2007 in July with a score of was 55.8, up markedly from 53.5 in June. The bottom line conclusion, according to AIA chief economist Kermit Baker? “Business conditions for the design and construction marketplace, and those industries associated with it, appear to be well-positioned for continued growth in the coming months.”

Just in time, as it happens, for accelerating construction costs. Over the past few days we have been looking at twin threats to the commercial real estate industry—the almost sure likelihood of rising interest rates and the rapid ascent of construction prices. Interest rates hikes are coming, but they are not here yet, while construction increases are. With that as background we asked a number of readers which was worse. A behavioral scientist might opt for the construction costs: those are happening now, while the pain of future rate hikes are still unrealized. And many respondents did agree-they are worse. But others are more leery of rate hikes. Read on to see the reasoning in both camps.

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