Interest rates on the rise
Geoff Ficke, Executive Vice President, Colliers sat down with Dallas Business Journals along side other industry experts to weigh in on the rise of interest rates.
"Since my team sells and finances triple-net and credit tenant lease property, we work on a range of different property types including office, medical, government, retail and industrial. My team's primary focus is the underlying credit of the tenant. Strong lease guarantees tend to positively position NNN and CTL during periods of economic uncertainty. Throughout the pandemic, we witnessed tremendous demand and capital migration into industrial, government and medical asset classes. We expect this to continue. Office and retail have both held up well but following COVID, the offering activity is really asset-specific within these sectors. Government-leased buildings and e-commerce resistant retail have been winners within these sectors. We believe that in 2022 investors will place a greater emphasis on property fundamentals and not just cap rates and current yield. Scrutinizing the price per foot and market rents will be more prevalent by investors and lenders.
"Historically, commercial property investment has been a terrific hedge against inflation. This assumes an asset has healthy annual rent escalations or strong prospects for rent-growth appreciation in the near term. From my perspective, investors will flock to certain product types that have strong potential for rent growth. There is a lot of uncertainty in the market stemming from the changes within our capital markets, the Russian waged war in Ukraine, supply chain issues, and the potential for additional COVID variants. During indeterminate times, tangible assets like real estate can be a safe haven for prudent investors."
Originally posted by Dallas Business Journal, read the full article here.