ATLANTA—With a strong US dollar, interest rates may soon rise. What does that mean for commercial real estate investors?

GlobeSt.com caught up with Jacob Frydman, CEO of United Realty, to get his thoughts. We asked him to look back, then make some predictions, in part one of this interview series.

Globest.com: Looking back, how would you define 2014 from an investor's perspective?

Frydman: 2014 saw an increase in CMBS availabilities. It also may be the end of the downward trend in interest rates, and will likely mark the low point in cap rates as we move toward the second half of this decade.

There were huge price escalations in residential real estate in the “Cinderella cities” like New York, San Francisco, Boston, and Washington. Whether those highs can continue to escalate is yet to be seen. 2014 was also a year of significant capital flows to REITs, driven primarily by yield-hungry investors.

GlobeSt.com: How will that change in 2015? Or will 2015 mirror 2014?

Frydman: 2015 will likely see a rise in interest rates, and with it a rise in cap rates.  I think it's still anyone's guess as to exactly when the Fed will begin raising rates, but there are some positive indicators in the economy that may encourage Yellen and the Fed to move on rates sooner rather than later in 2015.

Cap rates generally follow interest rates, holding all else constant, and as rates rise that will have the effect of reducing values on “flat” rental stream assets like single tenant credit retail leases with no rent increases.