Commercial Real Estate Plays It Safe
Yes, the market is lofty. No, lending standards aren't fraying.
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U.S. commercial real estate prices have reached new highs, but the sector is a much safer place today than it was before the 2008 financial crisis.
Low capitalization rates -- the net operating income a property generates relative to its price -- might normally keep investors away, but low borrowing costs have made potential returns from commercial real estate attractive.