EBA Risk Management April Meeting: The Future of CRE
Adapting to Change: Transaction Volume, Interest Rates, and the Future of CRE
The Environmental Bankers Association (EBA) presents their virtual monthly Risk Management Meeting on Wednesday, April 24 at 9:00 AM PT | 12:00 PM ET.
ERIS’ Dave Colonna, Director, Lender Services, speaks with John H. Wright, Jr., MAI, Senior Managing Director, BBG, about the dynamics of recent trends and what they mean for commercial real estate (CRE).
The decrease in CRE transaction volume, attributed to the escalation of interest rates, has led to broader bid/ask spreads and a reluctance among lenders to foreclose. While the onset of COVID-19 initially propelled transaction volume with low interest rates, the subsequent rise in rates has deterred investment in CRE. This presentation will explore the intricate ways interest rates influence transaction volume and property values, particularly as they amplify debt costs and capitalization rates. We will also discuss the inverse correlation between interest rates and cap rates and examine potential scenarios for the rebound of transaction volume, prevailing lending trends, sources of debt capital, active property categories, and sought-after investment locations.
