Falling Interest Rates Impact on Real Estate

Interest Rates Down 1% Since October 2018

•Fed signaling end of tightening cycle – No longer putting upward pressure on interest rates

•Global economic uncertainty and brewing trade war with China increases demand for bonds

•10-Year Treasury falls to levels on par with 2017

Falling Interest Rates Widen Yield Spread

•Lower cost of capital offers investors greater positive leverage – rewidens yield spread

•Deals that didn’t pencil 6 to 12 months ago may now be viable – opportunity revival

Long-Term Drivers of Real Estate Remain in Place

•Strong job creation, household formation & retail spending indicate healthy market outlook

•Considering extended portfolio performance and positioning for the next cycle are keys to success