New York - Market participants will either be net buyers or net sellers of real estate depending on their view of interest rates, said Susan Hudson-Wilson, founder and CEO of Boston-based Property & Portfolio Research Inc. The remarks were made at the opening session of the Commercial Mortgage Securities Association's 10th Annual convention, held last week in New York.
Hudson-Wilson said that conventional wisdom on interest rates is "simplistic," as it assumes that rising interest rates will have a negative impact on the performance and value of real estate, when it could actually be positive or negative depending on the reasons for the rise. For instance, as interest rates rise people usually assume that cap rates on property values will fall. However, this will depend on various factors, including whether interest rates are rising due to positive or negative reasons. She said that participants should have a definite take on the issue because this will determine their strategy on whether to sell or buy into the sector.