Is there a downside for investors looking at office properties?
“The one impediment – to even stabilized sales – is that the record low interest rates over the past few years have prompted owners with stabilized assets to put fixed-rate financing on their properties,” he said. “That makes it difficult for buyers because they typically must assume existing debt or incur substantial economic penalties for early repayment.” Despite the obstacles, $1.4 billion in transactions for office properties of 100,000 square feet or greater closed last year. That was then; now interest rates are rising. Nevertheless, Bernhaut said, “One thing is certain: plenty of capital continues to flow through the market. And with opportunities for investors to increase their market share in New Jersey, we anticipate continued strong, if not record-breaking, activity.” Cushman & Wakefield’s Financial Services Group completed in excess of $1 billion in sales in 2002 and again in 2003, and is currently on track to exceed those figures in 2004, he said. Interest Rate Rises: A N
