Credit-Market Swoon Sends Somber Message to Property Investors
- Commercial real estate price gains slowing as bond yields rise
- `Frenzied environment has stopped,' Green Street analyst says
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Commercial real estate investors are receiving ominous signals from the bond market.
Yields on U.S. corporate debt are rising -- touching a three-year high last month -- while projected returns on properties from apartment towers to offices to top-tier shopping malls stay stubbornly low. The narrowing divide suggests that, after five years of gains, prices may start to slide as other types of investments become more attractive, according to research firm Green Street Advisors LLC.