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  1. #1
    Registered User Enthusiast
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    Will CRE be Safe with Rising Rates

    How many of you are invested in REITs? Now that the Fed seems to be promising aggressive rate hikes for 2017, what did you think will happen to the sector?



    I cannot imagine that commercial real estate will be immune to higher credit costs and discount rates.

    But maybe it is just one of those things, and I will need to ride the cycle out.

    What do you think?

  2. Will CRE be Safe with Rising Rates
  3. #2
    Registered User Semi Pro Member
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    I'm interested to see what people have to say on this. I actually know some folks who argue REITs should replace bonds in your portfolio. Despite the fact that history shows that REITs fairly well correlate to the S&P 500, not to bonds.

  4. #3
    Registered User Junior Member
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    36
    No.

    Next question.

  5. #4
    Registered User Enthusiast
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    Quote Originally Posted by BigRedDad View Post
    I'm interested to see what people have to say on this. I actually know some folks who argue REITs should replace bonds in your portfolio. Despite the fact that history shows that REITs fairly well correlate to the S&P 500, not to bonds.
    Sometimes in life we can get ahead by just avoiding bad decisions.

    Treating REITs like your bond allocation seems like a bad decision.

  6. #5
    Registered User Pro Member
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    573
    Everything is safe. The Fed won't let any prices fall.

  7. #6
    Registered User Junior Member
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    We're probably going to find out soon what happens to RE when rates rise, as the Fed is expected to raise again on March 15th.

  8. #7
    Registered User Enthusiast
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    99
    If interest rates really do rise, then, yes, CRE will be hard hit.

  9. #8
    Registered User Junior Member
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    34
    Whoever anyone today says they think the stock markets are too expensive, they then say they want to diversify into real estate with the next breadth.

    That alone leads me to believe that RE is overvalued as well. And if it is overvalued and overlevereged, it will be a very tough place in a world of rising rates.

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