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David Shulman David Shulman is a senior economist at the UCLA Anderson Forecast.

LOS ANGELES—“Cap rates will be higher in six months and a lot higher in 18 months,” David Shulman, a senior economist for the UCLA Ziman Center for Real Estate and UCLA Anderson Forecast, tells GlobeSt.com about what investors should expect next year. Shulman formed his forecast after the November election, which increased the probability the interest rates will rise next year.

“Our sense is that cap rates are going to go up because a 75 basis point move in the 10-year treasury will affect cap rates,” Shulman says. “We think the 10-year treasury could be 3% at the end of 2017, and that doesn’t look like a heroic prediction anymore. If that is the case, that means cap rates are going to go up by at least 100 basis points from where they are, and I think that is conservative. You have to remember that interest rates are going up 225 basis points form the election.”

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Kelsi Maree Borland

Kelsi Maree Borland is a freelance journalist and magazine writer based in Los Angeles, California. For more than 5 years, she has extensively reported on the commercial real estate industry, covering major deals across all commercial asset classes, investment strategy and capital markets trends, market commentary, economic trends and new technologies disrupting and revolutionizing the industry. Her work appears daily on GlobeSt.com and regularly in Real Estate Forum Magazine. As a magazine writer, she covers lifestyle and travel trends. Her work has appeared in Angeleno, Los Angeles Magazine, Travel and Leisure and more.

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