Discussion: Interest Rates Rising, Good or Bad?
What is everyone's take on this? This can be a very subjective question, depending on who you ask. Both buyers and sellers are going to have a different take. How do you approach this question when asked? 

[{"id": "ei2hyxh", "text": "From a lenders perspective I look at rising interest rates as a threat because my product (loan financing) is getting more expensive which means my customers will be more selective. I don\u2019t want them to be too low because then it\u2019s hard to make any money, but don\u2019t want them to be too high either. ", "replies": [], "depth": 1}, {"id": "ei2i8fw", "text": "From the advisory side it's good especially if you have relationships with lenders who are willing to be more aggressive and compete in the market. Borrowers are definitely going to look for lower rates and if you can be that source, it's a win. Also, weeds out the guys/gals that are all talk. ", "replies": [], "depth": 1}, {"id": "ei2jz1c", "text": "Higher interest rates make deals cost more causing some people who rely of financing to slow down.\n", "replies": [], "depth": 1}, {"id": "ei2k6rg", "text": "From where we are now, I see it as a good thing.  Prices for real estate are too high, and an increasing interest rate should cause downward pressure on pricing.\n\nAs debt becomes more expensive, there are fewer buyers in the market and the value of real estate should plateau or fall.  I understand investors and lenders would be apprehensive towards rising interest rates, but it's needed due to the high cost of real estate right now throughout many parts of the US.  ", "replies": [{"id": "ei2ntk2", "text": "Agreed. Interest rates go up, cap rates go up. \n\nThe cap rate compression we\u2019re seeing in our market is unprecedented. We\u2019re seeing a lot of stupid money out of CA pay ridiculous caps for what the assets they\u2019re buying. \n\nBut it\u2019ll be a good thing during the next correction. That acquisitions guy that got his fee for whatever company in CA will ride off into the sunset and the assets will be re acquired by the local developers and investors who, right now, are sitting on piles of patient money waiting to strike. ", "replies": [{"id": "ei3boa4", "text": "As long as the yield gap between grade A office and treasuries stays around 2.5% or more, then the cap rates (regardless of their nominal amount) are consistent with their historical averages. However, given the concern for a slowing economy, global investors may place more pressure on cap rate compression through yield-seeking behavior as they shift to real estate from lower expectations in equity markets. Similarly, many mega investors (*e.g.*, GPIF) are looking to deploy large amounts of capital which may further compress CRE yields. ", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "ei2nl00", "text": "Depends who you are, if you in a large ready estate portfolio rising rates less to rising cap rate which means it's a lot but difficult to make money, led cash at refis.  But if your in a high demand market it will also help push up rents since people won't be able to build to a 4% return any longer with 5% rate on perm debt", "replies": [], "depth": 1}, {"id": "ei2vdx8", "text": "All my new loans are locked in at higher rates. Sure. But that's factored in to my ROI. Doesn't scare me. I see it as a general good thing. People with low yeilds and shorter term financing are the guys who are in trouble. But that was always bad product. Plus the amount of people with 10 year money right now is crazy. If there is a crash coming, it's coming from left field, it's not a carbon copy repeat of 2008.\n\n  \n", "replies": [], "depth": 1}, {"id": "ei3mn9x", "text": "Going to see some over leveraged defaults, and the well capitalized swoop in on good deals.", "replies": [], "depth": 1}, {"id": "eikj1uc", "text": "Absolutely that depends on who is getting into this. Sellers or buyers both have their opinion and so cannot be given one statement good or bad. ", "replies": [], "depth": 1}]