Commercial Real Estate Rates Rise, Says Fed

Growth. Abstract financial document, 3d graph of frosted glass.

The Federal Reserve announced on July 15 that commercial real estate prices have been rising quickly in certain regions of the country, and if the trend should continue, it’s possible that it could jeopardize the country’s financial stability.

According to a report from the Wall Street Journal, the Federal Reserve presented its semiannual report to Congress on Wednesday and stated that, in additional to increased property prices, the economy is now seeing that “underwriting standards at banks and in commercial mortgage-backed securities have been loosening.”

The raw data can be interpreted in two different ways: either as a positive display of economic growth — as many media outlets prefer to report it, or as a pessimistic expectation of a possible financial slump within a few years — as the central bank appears to see it.

The New York Daily News recently talked to Bob Knakal of the commercial brokerage firm Cushman and Wakefield, who said that “the market so far this year is on pace to set an all-time record. It’s a great time to be a broker.”

CNBC also reported that the American Institute of Architects (AIA) recently reported a four-point jump in its national architectural billings index, which reflects an increased demand for public buildings like healthcare facilities and schools; it has already been estimated that industrial vacancy rates will fall from 8.8% to 8.4% by the end of the year as more commercial buildings are snatched up.

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