I was recently quoted in Miami Today regarding the South Florida inflation rate, rising interest rates, and the impact on real estate and consumers. Well, there are a couple of things to keep in mind:
– When interest rates rise, consumers pull disposable income out of the market. They curtail their spending, and this will be a drag on our economic recovery in South Florida.
– When inflation takes off, it can be a positive event for commercial real estate. Commercial leases often are indexed to inflation, so commercial real estate offers one of the few hedges out there to protect against it.
Now, the powers that be have been suppressing interest rates for quite some time. I have to believe this will stop soon, but new Fed Chairman Janet Yellen seems to be leaning toward keeping the easy money policy for a while longer.
So, we’ll see.
The overall pace of business slows in the summer, but I have been ON FIRE. I’ve met with retail developers in preferred equity deals. Apartment deals are tough to do, but they’re great when you find them. Condo development financing is in high demand. Hotel and hospitality is smoking. It may even be time for some office space in certain locations.
If you’re a banker and you’re not making loans, you’re missing the boat. At Aztec Group, where I work, we are BUSY. We’re placing our own money and working with our partners to build institutional financing relationships.
So get out there are start doing some business.
By the way, be sure to follow me on Twitter at @FriedonBusiness. Look for #cranesup as I drive around town highlighting some of the interesting development deals here.