It depends who you ask. Certainly the idea of investing in income producing hard assets sounds like a good hedge regardless if the Fed is trying to hold off inflation. To me the idea that the value in dirt, the commodities it produces and rental income are timeless and ever increasing. If anything, the recent uncertainty so prevalent has made me more certain about commercial real estate.
From the National Real Estate Investor:
The Fed’s message that interest rates will remain stable for some time bodes well for property investors, contends Hughes. Economic realities of job creation, manufacturing output and consumer confidence will drive real estate fundamentals, he acknowledges, but other forces may drive capital to the sector.
“The recent volatility in the stock market will ultimately drive dollars into more secure investments, such as commercial real estate,” he says. “With property fundamentals improving and stability assured, we are going to see more investors putting their money into the commercial real estate arena, which will further solidify values.”
flickr photo cred: stoneford
So you’re telling me that I get increased acquisition competition, lower yields, CRE fundamentals remain challenged with a long time frame for recovery and as soon as the stock market stabilizes everyone is going to jump right back in to equities abandoning CRE? I said this on NREI but I think they didn’t approve my comment. Not surprising.
Yes, I am and as a result it will hopefully give more attention to the fundamentals and bring about more stability in the CRE market.