Chansak Joe/iStock via Getty Images
Chansak Joe/iStock via Getty Images
The commercial real estate sphere of business is starting to display an ease in demand as a new rising interest rate environment is starting to chip away at the market.
The Wall Street Journal reported that property sales totaled $39.4B for the month of Apr., which was lower by 16% compared with Apr. of 2021. Furthermore, the decline in property sales followed 13 straight months of increases.
As rates continue to rise it adds pressure to the sellers’ market as the pool of buyers shrinks in size in a simultaneous fashion. Enough of a landscape shift can swing the pendulum to a favorable market to be a buyer compared to a seller.
Combine the above recipe with the remote/hybrid workspace trend and commercial real estate can see clear cut challenges ahead.
See below a breakdown of related real estate stocks and exchange traded funds along with their year-to-date price action:
American Tower (NYSE:AMT) -6.6%, Prologis (NYSE:PLD) -22.5%, Simon Property Group (NYSE:SPG) -31.6%, Real Estate Select Sector SPDR ETF (NYSEARCA:XLRE) -14.8%, iShares U.S. Real Estate ETF (IYR) -15%, and the Vanguard Real Estate ETF (VNQ) -14.9%.
In broader market news, stock futures point to a lower open Tuesday, with neither bulls nor bears looking in control of the narrative.
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