What does “capital markets” mean in commercial real estate?
The equity in real estate sales, which in this market means selling office buildings. In other markets sometimes you sell apartments or other things. But Washington is such an office centric market that the way that I fill it out on my kid’s school application is that I say: “I sell office space.” All right, getting down to brass tacks, what are interest rates doing to your sales? Clearly at some point an increase in interest rates is going to trickle into real estate and cause prices to either stabilize or drop, depending upon how far up the rates go. Since we’ve had 17 consecutive months of interest rate increases, I would say we are certainly starting to see some impact. But so far it has not kept us from achieving record pricing. Why? I would say that the dominant influence on real estate prices in Washington is the wealth and strength of this market as opposed to the rest of the world. And the demand push of dollars into real estate generally. I still believe that until we have 18
