Fed harps again on growing risk in U.S. commercial real estate

February 16, 2017

Fed harps again on growing risk in U.S. commercial real estate

February 14, 2017 | Reuters 

Architectural details of modern apartment building.

Federal Reserve officials do not see broad risks developing in U.S. asset markets save for one: commercial real estate.

That concern was evident on Tuesday in the U.S. central bank’s semiannual Monetary Policy Report to Congress, in which commercial property prices were singled out as a “growing concern” even as the Fed described wider risks to financial stability as “moderate.”

“Commercial real estate (CRE) valuations, which have been an area of growing concern over the past year, rose further, with property prices continuing to climb and capitalization rates decreasing to historically low levels,” said the report, which is prepared by Fed staff and delivered to Congress in tandem with Chair Janet Yellen’s twice-yearly testimony to lawmakers.

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Loreen M. Gilbert, CIMA, AIF, CRC, CLTC – President, WealthWise Financial Services
Blue Vault
July 6, 2016

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