I see no reason why the trend away from cities and office occupancy shall not continue and there is every reason to believe that interest rates must rise and I think, therefore, commercial real estate is a very good short.
Posted on 01/15/2022 7:29:34 AM PST by Browns Ultra Fan
Inflation is burning out of control. While home price growth has been off the cherts (as Jean-Ralphio would say), commercial real estate has jumped incredibly at 22% YoY. The Bloomberg charting function hasn’t updated for the Q4 NCREIF report yet so I had to manually write-in 22% on the following chart.
To quote Dean Martin, “Ain’t that a kick in the head.” Commercial real estate returns are now higher than house price growth.
So, what will happen IF The Fed follows through with its monetary stimulus reduction? JPMC’s Jaime Dimon warns that The Fed could hike 7 times in 2022 and not be ‘sweet and gentle’.
But The Fed seems to be stuck in underworld and doing a terrible job at signalling their intentions if Dimon thinks that The Fed could raise rates 7 times in 2022.
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The Deep State doesn’t want interest rates to rise. Low rates allow them to continue to borrow and spend, borrow and spend.
Plus inflation allows them to pay back debt with inflated dollars.
What’s not to like?
Wish I understood this more. I would have thought that with the shift to remote working, commercial real estate would be in trouble. Has this “shift” been overhyped? I know that some companies are rethinking.
Come on and satisfy the need in me.
All you need to know is they’ll be passing the costs onto you the consumer.
“Has this “shift” been overhyped? I know that some companies are rethinking.”
Nearly every busines client of one does not like WFH. One issue is huge increase of mstakes being made..things get lost in translation through emails.
Nothing like face to face contact to discuss a complex issue.
Once covid goes away or dies down the people will be sent back to their offices.
Whats 5% of 30 trillion? 2.5%? 1.5?
They raise the rates that much, that will be the cost of the interest rate payments for the federal debt.
No way the Fed raises 7 times. They would cripple the economy — during an election year! Not gonna happen.
Three 25 bp hikes IMO.
I see no reason why the trend away from cities and office occupancy shall not continue and there is every reason to believe that interest rates must rise and I think, therefore, commercial real estate is a very good short.
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Commercial real estate returns up 22%.
Yes, that’s been awesome. There’s more good news to come soon in many areas.
In less than 3 years the FED will be more worried about deflation than inflation. It’s job right now is to tame the effect of Biden money flood without killing the economy. We can only wait, watch and react as needed as they try to thread the needle created by government one mroe time.
A 2% overnight rate would cripple the economy?
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