Jacob Frydman on Rising Real Estate Interest Rates can Have Unexpected Results
It is not a question of if inflation will increase, but when.
March 28, 2019 /MarketersMedia/ —
The press named Jacob Frydman a leader in real estate investments, as he gave advise related to all things CRE (commercial real estate) on the U.S. East Coast for over 3 decades. Because of his vast knowledge and experience, he’s regularly called in by pundits to better explain developments in the CRE sector to the public. As a consultant, he has been analyzing the market to predict the unexpected courses it might take. For the past few years, through media appearances and interviews he has forecast on the inevitable rise of interest rates and their effect on the CRE market.
A survey done recently by CIT Group shows that many executives in CRE-focused companies are concerned about the future of the real estate market, and that worry is strongly tied to factors including interest rates, unemployment, and the Federal Reserve’s Federal Fund Rates. The latter two can heavily affect the former, according to Frydman, “in this economic environment, enough pressure has been built to warrant worry about increased inflation. It is not a question of if inflation will increase, but when. The Fed understands it will need to raise the Federal Funds Rate in the near future. Low rates will not linger much longer.” Jacob Frydman has been cautioning of these developments for quite a while, and it would seem that his predictions may soon come to pass. However, Frydman has also repeatedly expressed his confidence in the real estate market and its ability to bounce back from downturns. “…These markets are, in fact, always cyclical,” he told Fox Business News, “…we will go through the downs of the market…the ups of the market, the greed of the market, and the heights of the market.”
Frydman points out that despite these uncertainties, there is still a greater demand for prime real estate than there is a ready supply, and a study by Dr. Martha Peyton and Dr. Edward F. Pierzak of TIAA-CREF seems to back this up. “Despite moderating total return expectations,” the report’s conclusion reads, “real estate performance is expected to remain attractive compared to other asset classes and real estate should remain an important part of investors’ multi-asset class portfolios.” Jacob Frydman also cautions potential investors to choose the right options. He believes that the United States is too heavily focused on retail real estate, and the transfer of consumer traffic from brick-and-mortar stores to online retailers provides opportunities in industrial real estate, specifically distribution centers.
A renowned expert on value added investments, Jacob Frydman has acquired over five million square feet of real estate, with transactions of up to $2 billion, during the course of his 30-year career. He has served as a CEO, Chairman, and CIO of First Capital Real Estate Trust, a guest lecturer at Columbia University, and a television show producer. Finance graduate of Boston University and Juris Doctor recipient of Case Western Reserve University School of Law, Frydman often participates as a speaker and panelist at numerous industry seminars and on Fox Business, CNBC, Bloomberg Television and other news media, where he speaks on matters relating to property investments and trends in real estate. Having retired from his role as a CEO of a public REIT in 2015, Frydman seeks out special situations where he can enhance a property’s value, which he undertakes alone or at times with partners.
Jacob Frydman – Blog – JacobFrydmanNews.com: http://JacobFrydmanNews.com
Jacob Frydman (@jacobfrydman) – Twitter: https://twitter.com/jacobfrydman
Jacob Frydman — Huffington Post: http://www.huffingtonpost.com/author/jacob-frydman
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