---
title: Is the Commercial Property Market Becoming Overwhelmed?
description: Is the Commercial Property Market Becoming Overwhelmed?
---

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# Is the Commercial Property Market Becoming Overwhelmed?

[Mike Smith](https://blog.plrisk.com/author/mike-smith)

 Aug 26, 2015 4:07:45 PM

[![Is the Commercial Property Market Becoming Overwhelmed](https://blog.plrisk.com/hs-fs/hubfs/Imported_Blog_Media/Is-the-Commercial-Property-Market-Becoming-Overwhelmed-300x229.jpg?width=300&height=229&name=Is-the-Commercial-Property-Market-Becoming-Overwhelmed-300x229.jpg)](https://blog.plrisk.com/hubfs/Imported_Blog_Media/Is-the-Commercial-Property-Market-Becoming-Overwhelmed-1.jpg)Commercial real estate investment is reaching record highs worldwide; raising concerns the market is going to mimic the 2010 real estate crash. A combination of low interest rates, investor pushing, and deal activity is contributing to a saturated global property market. As sales are skyrocketing, [Professional Liability for Commercial Real Estate Agents](http://www.plrisk.com/professions/) is critical during this time.

According to [The Wall Street Journal](http://www.wsj.com/), the value of U.S. commercial real estate transactions in the first half of 2015 jumped 36 percent from a year earlier to $225.1 billion, which trumps 2006’s figures. As low interest rates are causing an influx of cash to be propelled into commercial economies, real estate has become increasingly attractive to buyers.

“We’re calling it a late-cycle market now. If too much capital comes into any asset class, generally not-so-good things tend to follow” stated Jacques Gordon of LaSalle Investment Management. Gordon is referring to the historical trend of low interest rates increasing commercial real estate in heavily populated and growing cities. As such, central banks have pushed investors into risky real estate purchases.

In addition, foreign investors have also taken note of the booming market. For example, WSJ mentioned that China’s Anbang Insurance Group purchased New York’s Waldorf-Astoria hotel for $1.95 billion and China’s Sunshine Insurance Group Co., also purchased New York’s Baccarat Hotel for upwards of $230 million.

While the real estate market is undoubtedly recovering from its tanking in 2008, the rate of sales has been both exciting and concerning to experts. Analysts are cautious that property values could plummet if interest rates continue to rise this quickly. What’s more, the Federal Reserve is already preparing to shift toward increased interest rates by the end of the year to combat this issue. The rate surge could contribute to global repercussions and trigger mortgage defaults again.

The Wall Street Journal also mentions that banks had an estimated $1.7 trillion in commercial real-estate loans in the first quarter of this year, which is only 2.6% shy of the 2009 record before the crash, according to Trepp LLC.

In addition to bringing you the latest news from the insurance industry, [PL Risk](http://www.plrisk.com/) provides [Resources for Agents and Brokers](http://www.plrisk.com/for-agents/) nationwide. We’ve recently implemented [Hiscox Now](http://www.plrisk.com/hiscox-now/), which allows agents their own access to Hiscox and instant quoting. For more information about our products and services, contact us today at (855) 403-5982.

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