A Strong U.S. Dollar Could Mean A Lot — And Not So Much — For Commercial Property Investment

After the U.S. posted a second consecutive quarter of negative growth, "recession" is the word of the day. But with a job market still churning along, record-high rents in multifamily and industrial properties, and a strong dollar, the question of whether the economy is in a recession is an open one.…

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Last week, the threat of a U.S. recession came into sharper focus, as new data showed the country's gross domestic product had shrunk for the second quarter in a row, and the Federal Reserve once again hiked interest rates to curb inflation.

On this episode of Bisnow Reports, we are talking about the real estate fallout of what may be a recession — or may not, depending on who you ask — but what is certainly a shift in economic conditions that is having real consequences in the market. Bisnow UK Editor Mike Phillips discusses how international real estate investors are behaving amid global uncertainty, where deals have been put on ice or stalled as a result of the market, and what it may take for the standoff between buyers and sellers to end. 

“There will be a point, if you own a property in a fund that is coming to the end of its life, at some point you will have to sell and give money back to investors,” Phillips said. "There will be issues with refinancing.”

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Andrew Schaap, CEO of data center provider Aligned, embodies what he calls the natural tension of a sector that straddles the worlds of commercial real estate and information technology. 

Prior to joining Aligned in 2017, Schaap spent 11 years at data center REIT Digital Realty Trust, ultimately serving as senior vice president in charge of large-scale global data center builds and major international transactions. Yet his path into the data center development space started firmly in the realm of tech. Schaap co-founded a software firm that was acquired in 2004 and subsequently held leadership positions at Sysix Technologies and Sterling Network Services.

Dallas-based Aligned has become one of the leading North American data center providers, with a development strategy focused primarily on build-to-suit facilities tailored to hyperscale clients like cloud providers and as-a-service technology firms, social media companies and other large enterprises. Aligned operates campuses in Dallas, Northern Virginia, Chicago, Phoenix and Salt Lake City. 

Along with continuing the company’s growth as a flood of private capital flows toward digital infrastructure, Schaap said he is committed to helping cultivate the next generation of leaders in a data center sector that has struggled to attract younger workers.

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