Jerald Turboff guides the Prime Capital Corporation in Houston as president and provides clients with real estate brokerage and investment solutions. A licensed Texas real estate professional, Jerald Turboff follows trends in the country’s real estate sector.
With inflation and high-interest rates having an effect, lending for commercial real estate has changed radically since the relatively high-flying 2021 to 2022 debt market. Stricter lending standards and higher financing costs have depressed property values, as investors find it more challenging to put together the necessary capital for projects to move forward.
That said, consumer spending and business activity continue at healthy levels, which makes a relatively rapid rebound a distinct possibility. In fact, a drop in real estate prices provides an opportunity for interested investors to find ways to obtain capital and take advantage of lower prices and less competition for prime properties.
In addition, one major issue is beginning to see resolution. For several months, interest rates rose so quickly that potential buyers and sellers were unsure when new rates would normalize. With a relatively predictable interest rate landscape ahead, real estate analysts believe that prices can adjust to a new normal, and capital can begin to move more freely again.
With inflation and high-interest rates having an effect, lending for commercial real estate has changed radically since the relatively high-flying 2021 to 2022 debt market. Stricter lending standards and higher financing costs have depressed property values, as investors find it more challenging to put together the necessary capital for projects to move forward.
That said, consumer spending and business activity continue at healthy levels, which makes a relatively rapid rebound a distinct possibility. In fact, a drop in real estate prices provides an opportunity for interested investors to find ways to obtain capital and take advantage of lower prices and less competition for prime properties.
In addition, one major issue is beginning to see resolution. For several months, interest rates rose so quickly that potential buyers and sellers were unsure when new rates would normalize. With a relatively predictable interest rate landscape ahead, real estate analysts believe that prices can adjust to a new normal, and capital can begin to move more freely again.
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