FIVE FACTORS THAT COULD LEAD TO $5 COMMERCIAL REAL ESTATE RENTS | Forrest Blake * Los Angeles Commercial Real Estate

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Tenant Perspective – Part 1

July 6th, 2017

FIVE FACTORS THAT COULD LEAD TO $5 COMMERCIAL REAL ESTATE RENTS

1. Rising interest rates:

Rising interest rates and corresponding rental rate increases have a direct impact on tenants. Tapering off from its policy of quantitative easing, the Federal

Reserve has reduced its purchases of assets from $85 billion to $75 billion per month. Further tapering is expected to cause interest rates to rise.

Twelve months ago, 30-year mortgage rates stood at 3.2 percent. In April 2014, rates are up to 4.4 percent, and over the next few years we may see further increases of up to three percent in rates for building owners. The resulting rise in rental rates could prove dramatic for tenants whose leases are expiring. The solution is to start now to negotiate a long-term lease at a reduced rate.

Click Here for the 2nd factor.

For more information or to answer questions please contact.

Forrest Blake | Senior Vice President

SVN | Commercial – DTLA

800 South Figueroa Street, Suite 925, Los Angeles, CA 90017

Phone 213.618.4196 | Mobile 310.850.2381

forrest.blake@svn.com | www.svn.com

CalDRE# 01054174

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Forrest Blake | Senior Vice President

SVN | Commercial - DTLA

800 South Figueroa Street, Suite 925, Los Angeles, CA 90017

Phone 213.618.4196 | Mobile 310.850.2381

forrest.blake@svn.com | www.svn.com

CalDRE# 01054174

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