After a summer of decreased unemployment and high expectations that the Federal Reserve would begin to raise interest rates in September, the Feds balked at an increase, surprising most people. Was it the volatile stock market in August, a sputtering economy in Canada or the sputtering of the Chinese economy?
Well known economist, columnist and radio show host, Dr. Sam Chandan, Professor in the Associated Faculty of Real Estate The Wharton School & Host of the Real Estate Hour SiriusXM Business Radio, explains, in detail, how the Fed’s action, or inaction, as the case may be, effects commercial real estate.
This is the first in a series of videos and podcasts taken from my recent interview with Dr. Chandan in which he explains the economic “crises” conditions in 2008 & 2009 that led to a record, low cost of capital. While the crisis intervention type of action by the Feds still remain in place, Dr. Chandan asserts that the same crises conditions of the past, no longer exist.
Today, investors appetite for risk has increased providing for an increased flow of capital into real estate according to Dr. Chandan and he does not feel that any increase in the short term is likely or should affect long term strategies. With that being said, timing is everything and the rising cost of borrowing capital will cause some investors trepidation.
Professor Sam Chandan is Founder and Chief Economist of Chandan Economics, associated faculty in the Real Estate Department at the Wharton School of the University of Pennsylvania, and National Economist (honoris causa) of the Real Estate Lenders Association. Dr. Chandan’s research and market commentary are focussed on commercial real estate capital markets, the structure and regulation of apartment housing finance, and the credit performance of residential and commercial mortgages. He is the editor and co-author of Real Estate Finance, a columnist for the New York Observer and GlobeSt, and co-host of the Real Estate Hour on SiriusXM Business Radio.
Dr. Chandan has held advisory and editorial board appointments at the Federal Reserve Bank of Atlanta, the Real Estate Research Institute, the National Center for Seniors Housing, the Commercial Real Estate Finance Council, and Multihousing News, among others. Prior to founding Chandan Economics, Dr. Chandan was Chief Economist at Reis, Inc. and Global Chief Economist at Real Capital Analytics. He holds a PhD in Applied Economics from the Wharton School, was a doctoral scholar in the Economics Department at Princeton University, and has served as a visiting professor in the Economics Department at Dartmouth College. Dr. Chandan currently teaches Real Estate Investments at Wharton.