Rate hikes continued to dominate the commercial real estate headlines in Q2, as rates reached a 20-year high, and the overnight rate crested five percent.
- Continued raises have further dampened the investment market, as uncertainty continues in the lending market.
- Overall investment volume remains muted due to the uncertainty regarding return-to-office, and lender hesitancy to participate in the office market.
- Assets more tied to fundamentals, such as population growth and the job market, continue to perform well.
- Yields are expected to level off for many assets, with the outlook for Q3 cap rates flat for hotels, many industrial markets, secondary apartment markets, and stronger retail assets.