Webinar Thursday 10/13 @4pm ask our Managing Director and Real estate lawyer any CRE questions you have.
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[{"id": "irt58pn", "text": "What is the relationship between cap rates and the federal funds rate? How is it possible that the risk free rate of return can be higher than what cap rates are on the market? \n\nDoes land have any value other than pure speculation? If no, how would you expect land values to behave in a risk off environment? \n\nWill we see a return to mark to market? How are industrial developers getting getting projects to pencil out and is there a flight to quality, ie infill markets.", "replies": [{"id": "irtapuk", "text": "Ultimately the price of the asset comes from it's return versus the risk free rate, and the riskiness of that asset. If rents don't go up, then the value of the asset must go down until the cap rate is greater or equal to risk free rate + the risk premium.\n\nAll this to say prices are too high, but do have a value", "replies": [], "depth": 2}], "depth": 1}]