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The last week has seen an amazing proliferation of researchers and journalists cogitating on the impact of rising interest rates on commercial property values. It’s a critical issue for our industry. But it’s hardly new or unexpected or unexplored. The countercyclical influence of low interest rates on values is beginning to ebb; for many risk-averse investors and lenders, understanding the magnitude of that influence was most important when it was approaching its peak. In some segments of the market, cash flow will lag adjustments in the cost of capital with significant implications for property value trajectories. However inconvienient, the time for making that connection and raising a flag is in the rearview mirror, even if it’s only now becoming good copy for the national broadsheets.

January 2011—If baseline measures of debt capital costs climb, property values, borrowing costs, and lenders’ loss-mitigation strategies will each have to adjust in ways that will temper current investment trends (Chandan, New York Observer)

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