Perspective: Q2 2019 Commercial Real Estate Cap Rates In Major Canadian Markets
Stuart Barron • 8/27/2019
Uncertainty is the watchword of the day as world economies grapple with trade wars, Brexit, political turmoil and weakening economic fundamentals.
Still, there are several silver linings that are expected to extend the growth cycle for Canada’s commercial real estate markets. The most significant of these is the emerging downward trend in interest rates. On July 31, the Federal Reserve Board cut 25 basis points off its benchmark overnight lending rate. This about-face on interest rate policy aims to stimulate the overall U.S. economy in the face of weakening global economic conditions. Of relevance to Canadian investors, the Bank of Canada is expected to follow suit, and cut interest rates by 25 basis points before January 2020.