At its March meeting, the Federal Reserve Bank announced that it will not increase interest rates in 2019 as previously planned. While this act of patience reflects signs of a slowing economy, the Fed is quick to point out that financial conditions remain strong with low unemployment, growing wages and stable consumer confidence. For investors in commercial real estate (CRE), the Fed’s announcement is good news. Borrowing costs remain low as property value continue to rise and capital continues to flow into the market. Historically, commercial real estate lags the general economy, meaning that if an economic downturn occurs, the CRE market will not feel the effects for another year or two. This gives investors the opportunity to assess their portfolios and diversify their holdings in preparation for a potential recession. Properties with strong fundamentals in prime locations that continue to innovate and adapt to consumers’ new normal will not suffer damaging effects from a downturn. It’s also beneficial for investors to work with experienced real estate professionals with strong tenant relationships who can quickly fill occupancies and/or repurpose a property for greater use.
With offices in Miami, Orlando, New York City and Geneva, the team at Orion works with investors, developers, property owners and brokers through all phases of real estate transactions, from strategic planning and analysis to financing, negotiation, property management and disposition. For more information, call (305) 278-8400 or email email@example.com.