Commercial Investment Real Estate

MAR-APR 2016

Commercial Investment Real Estate is the magazine of the CCIM Institute, the leading provider of commercial real estate education. CIRE covers market trends, current developments, and business strategies within the commercial real estate field.

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31 March | April | 2016 CCIM.com 2016 Capital Markets Forecast by Patrick Ward T e capital markets play a signif cant role in the investment and continued growth of the commercial real estate sector. The outlook of the f inancial land- scape and what we can expect from the capital markets in 2016 has a signif cant impact on investment decisions this year. In 2015, we saw a stable, strong financial landscape with ample capital sources available to meet the demand and the continued growth of the market. However, the question remains — What can we anticipate from the capital markets in 2016? This brief overview of the dynam- ics that will likely impact 2016's f nancial climate is based on 42 years of experience in providing f nancing throughout the real estate industry. Factors at Play Capital Availability. The number of capital sources available will remain strong throughout 2016. With that said, we will continue to see the gap widen between the costs of capital available in major metropolitan areas and in small metros. Most of the large national lend- ers have been investing and will continue to remain active in U.S. major metropolitan markets, with the small exception of those heavily inf uenced by oil. Regional and local lenders will remain the option for the smaller metro areas. T is division of investor size creates a disparity in costs. Smaller markets have a higher cost of capital than larger markets due to the lack of competition from large, Rising interest rates will not upset the apple cart this year. DAJ/Thinkstock

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