Landlords Face Slowing Price Gains After U.S. Records Shattered via Bloomberg Business

For commercial real estate investors, the good times may be over.

The Federal Reserve’s first interest-rate increase in nine years has removed a crutch that’s helped sustain 33 consecutive months of price growth of at least 10 percent and padded returns for buildings from office towers to luxury hotels. While values won’t necessarily fall, they aren’t likely to climb much higher next year, according to Tad Philipp, a commercial-property debt analyst at Moody’s Investors Service.

“A lot of the smart money is saying it’s a better time to sell than to buy,” Philipp said in an interview. “The warning light is on that the rate of appreciation is poised to decelerate.”

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