Paul Bennett takes on the breaking news of Israel’s strikes on Iranian nuclear sites and the resulting escalation—laying out what this could mean for U.S. real estate. Paul draws on 40 years of investment experience to address what matters: heightened market volatility, possible shifts in oil and inflation, and the sector-by-sector fundamentals that investors need to understand as the global crisis unfolds. Political opinions are left aside; the focus stays on how international instability can shape cap rates, transaction volume, and refinancing across key property types.
Key Highlights
How immediate news from the Middle East sent equities down and triggered a clear risk-off mood among investors.
Direct connection between Middle East conflict, oil price spikes, and the potential for higher inflation—impacting transportation, utilities, and supply chains.
Why higher or sustained interest rates could follow, delaying Fed rate cuts and complicating refinances and new deals.
Sector details: office properties are the most exposed to downside risk; retail, industrial, and small-bay industrial may see mild impacts from slower sentiment and rising costs; multifamily and self storage remain comparatively resilient, with only modest headwinds expected for now.
Uncertainty around foreign capital flows: gateway cities like New York, LA, Miami, and San Francisco could see delays or reductions, but some foreign capital may seek safety in the U.S. if uncertainty builds elsewhere.
What to watch: duration and severity of the conflict, changes in oil futures, transaction slowdowns, and which players get drawn in—all will set the tone for real estate’s path in the coming weeks.
References
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