CHICAGO, IL—A strong US economy continued to fuel the commercial real estate market in 2018. And while the industry is expected to face headwinds in the form of rising interest rates, tightening credit and lingering uncertainty over the geopolitical climate, many commercial real estate experts remain bullish on the market going into the new year, particularly as the longer-term effects of tax reform come into focus.
“Interest rate movement will be front and center in 2019,” says Steven Weinstock, first vice president and regional manager of Marcus & Millichap's Chicago Oak Brook office and national director of the company's National Land Group. “As interest rates go up, we will see some cap rate decompression, particularly for income-producing properties locked into long-term leases without adequate rent bumps to keep pace with inflation and the rising cost of capital.”
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