The general feeling in the market is that borrowers have accepted that slightly higher rates are here to stay. This supports continued high sales volume for commercial property through 2019. The commercial real estate lending environment has many new lenders. Loans on commercial property are less likely to see rates jump up as they have in the past. In general, the US commercial real estate market is very stable and values are very stable.
The US Economy
Interest Rates and Property Values
The Midterm Election
Government and Trade
Rate and Spreads
*The HVCRE regulation within the Basel III capital requirements, effective as of January 1, 2015, has been clarified with S.2155 signed by the President on May 24, 2019. In order to be exempt from an HVCRE designation, borrowers who originate commercial acquisition, development and construction (ADC) loans must meet a 15% borrowers equity requirement, value or appraisal is based on the as “complete value” of the development. HVCRE loans are subject to a 150% risk weight requirement – higher than the 100% requirement. (from https://www.aba.com/Advocacy/Issues/Pages/HVCRE.aspx)