LOS ANGELES—Middle market investors aren’t concerned about the incoming administration or the potential for rising interest rates next year, according to Rich Johns, a broker at Keller Williams Commercial. Johns focuses on high-net worth and private investors in the $5 million to $10 million range, and from his experience working with these investors daily, they are not concerned about the new administration or rising rates in the next year.
“It is a small topic, and I don’t really see [the new administration] being a game changer for these investors,” Johns tells GlobeSt.com. “These are investors that look at each transaction on a case-by-case basis to determine if there is an ability to raise rents, renovate and update, and if it is going to be a profitable investment going forward. The new president isn’t necessarily going to affect what those investors do for one building from a purchase standpoint.”
That isn’t to say that investors in this class aren’t watching interest rates—or even affected by them—but Johns says that rates are already at historical lows and savvy investors understand that this is still a good time to buy. “Interest rates certainly do affect buying power, and I have see a buyer take a quarter of a step backward when interest rates tick up in the middle of a due diligence period,” he says. “It doesn’t necessarily move the bar much, and if you look at where rates are today, they are still incredibly low. They will certainly go up over time; they have to, but this is still one of the greatest times to buy from an interest rate perspective.”
Johns focuses on properties in Westside markets and has a special expertise in Beverly Hills multifamily. He doesn’t expect the new administration or the Fed’s rate increase to affect the Beverly Hills market either. “This is one of the greatest cities in the world,” he says. “I don’t anticipate that changing going forward.”