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.
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