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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.
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