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How the fed's decision will impact commercial real estate

The Fed's impact on commercial real estate

With the Fed raising the interest rate by 25 basis points, there is some concern that it could have a negative impact on commercial real estate as capitalization rates sometimes correlate to interest rates.

Spencer Levy, CBRE's head of research for the Americas, sees it very differently, however.

"The most immediate impact in commercial real estate is raising short term interest rates, which we've already seen," he told CNBC.

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CBRE predicts that certain markets may more susceptible than others to interest rate increases, such as Washington, D.C., New York and Boston. While cities like Dallas and Atlanta could be impacted less due to lower cap rate compression and some rent growth.

Levy said the minimal impact will be short lived. "Over time we do expect the fed to raise interest rates by 100 or more basis points. Once that does occur, there will be more impact on certain cities."