A new report in the Wall Street Journal indicates that it might be a tough year ahead for the commercial real estate market:
“An important indicator in the U.S. commercial real-estate market is signaling that a bull run is on shaky ground heading into the new year…The gap between long-term borrowing rates and what some types of commercial properties on average yield is the narrowest it has been since 2008, according to data firm Trepp LLC…That is generally a bearish sign because most investors borrow heavily to acquire office buildings, hotels, shopping malls and other types of commercial real estate. Higher borrowing costs mean tighter margins and less room for error.”