Choose Carefully When Investing in CRE to Hedge Inflation

Commercial real estate has long been a tool to hedge inflation by storing value. But after 15 years of dovish Federal Reserve monetary policy, massive stimulus from tax cuts and then pandemic aid, and disrupted supply chains, the usual may not be the new normal. Investors seeking an inflation hedge should look carefully at CRE and exactly what areas they’re getting into.

Many in the industry are spooked. “At a macro level, it’s nervousness about systemic inflation,” Paul Getty, CEO at First Guardian Group, tells GlobeSt.com. The overall M2 money supply has “grown in excess of 20% in the last year,” he adds. “Those who lived back in the 70s are getting nervous about the same kinds of things we heard back in the 70s.”