The Walker Webcast Dr. Peter Linneman, Leading Economist, Professor Emeritus, The Wharton School of Business Part 20
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Jan 16, 2025 
Dr. Peter Linneman, a leading economist and Professor Emeritus at The Wharton School, shares his expertise on economic forecasts and the commercial real estate market. He discusses the implications of political shifts, interest rates, and the fallout from recent California wildfires on insurance costs. Linneman analyzes how global conflicts, like the war in Ukraine, impact the U.S. economy and explores the relationship between tariffs, inflation, and real estate dynamics, while providing insight on investment strategies for various sectors.
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Cap Rates and Capital Flows
- Cap rates don't move with small interest rate changes, only with large flows of capital.
- Large capital flows are driven by investors needing to get in or out of the market, not interest rates.
Transaction Volume as a Proxy for Capital Flows
- Low transaction volumes indicate a low tide of capital.
- High transaction volumes indicate a high tide, which can drive cap rates down.
US Debt and Interest Rates
- US federal debt has little impact on interest rates because the US is wealthy and debt is backed by taxpayers.
- This is different for less wealthy countries where higher debt levels lead to higher interest rates.