The Federal Reserve is saying that it will start to taper off its purchases of $120 billion of bonds per month. Also, Fed officials were split 50-50 on an interest rate hike in 2022 according to Oxford Economics, calling the meeting "slightly more hawkish."
But what does that mean for commercial real estate? One of those good and bad news scenarios.
"The tapering of bond purchases could result in a selloff of Treasuries," David Pascale, senior vice president at George Smith Partners, tells GlobeSt.com. "This could increase interest rates for virtually all CRE permanent loans, which are typically priced over the 10-Year Treasury. Higher rates could lead to higher cap rates and therefore lower values for CRE assets nationwide."
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