The Effects of Inflation on Commercial Real Estate

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It is evident that there is a direct correlation between inflation and the pricing of commercial real estate. Often, the “cure” to inflation is an increase in federal interest rates which have a direct impact on commercial real estate valuations.  Economists have been expecting an increase in interest rates but were not expecting the federal government’s recent suggestion of three potential hikes in 2022.  Additionally, there are rumored hikes in 2023, and more in 2024.  The message is clear: due to the rapid inflationary pressures, driven largely by supply chain disruptions, the Federal Reserve has an aggressive plan to increase these rates.

Better Times Ahead

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Expect 2021 to perform across all sectors. We are finally getting optimistic results from the Covid vaccines and will be back to business as usual in no time. 

Stay healthy and remain positive. Next year will be much different.

Office: A Hot Commodity in Short Hills/Summit Area

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The Short Hills and Summit areas are continuing to flourish for the retail office sectors and as far as I can tell, these locations have been great for the investors that own them. A big part of this is because of the accessibility of these locations to Manhattan. Since Manhattan is just far enough away from the hustle and bustle, but close enough to access at any given time many companies have satellite offices and locations around the Short Hills and Summit areas.