Instant Insights / Inflation's Impact on CRE


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Analysts from Fitch Ratings say stagflation is likely to lead to lower CRE valuations and a “prolonged period” of elevated cap rates.

“Stagflation is the primary potential macroeconomic risk currently facing commercial real estate,” analysts note. “High inflation and weak economic growth could result in lower CRE valuations. This would be due to modestly growing or declining nominal net operating income (NOI) from soft tenant demand and elevated capitalization rates reflecting a higher risk premium.”


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