Commercial real estate has one foot in the publicly traded markets – think REITs and CMBS – and one foot in what might be called the “real” economy – think buildings, tenants, landlords, net operating incomes, cap rates and IRRs. The publicly traded part of the industry is feeling the volatility created by the sudden spike in interest rates and the anticipated “tapering” (as the Fed likes to say) of the central bank’s $85 billion in monthly bond purchases. This volatility is manifested in prices for REITs, CMBS and loan terms as lenders come to grips with the changing interest rate landscape.

The real economy is slower to react. Leasing and property investment deals take a long time to assemble, especially when there is a lot of uncertainty embedded in the economy, financial markets and government policy. The planning and steps in the deal-making process don’t stop because of a few days of market volatility…