How Will Higher Interest Rates Affect REIT Values?

Chicago, IL, July 13, 2013 --( The real estate roller coaster has turned many would-be home buyers into renters, but how will this shifting trend affect the market as a whole? Al Goldstein, President of Pangea Properties, a private real estate investment trust (REIT), discusses the implications the surge in rental demands will have on REITs as well as other factors.

“Conventional wisdom tells us that rising interest rates will negatively impact REITs due to decreased earnings and more expensive capital to fuel growth,” says Goldstein. “But under the right circumstances there are significant opportunities.”

Goldstein explains that rising interest rates serve as a potential indicator of a strengthening economy. “Many young adults are opting to rent as they are saddled with student debt and have limited access to credit,” says Goldstein. “Ultimately these factors will greatly benefit businesses and drive profitability through increased demand and higher rents.”

Well capitalized firms, such as Pangea, will have easier access to capital markets and result in a lowered cost of capital compared to many competitors. “This offers us a distinct advantage as we continue our growth strategy,” adds Goldstein.

About Pangea Properties:
Pangea Properties is a private real estate investment trust (REIT) targeting the distressed residential multi-family real estate market. Pangea was founded in 2008 by Al Goldstein and Steve Joung with one mission: to bring service, value and care to its residents. The entrepreneurs saw an opportunity in the Chicago market to create a real estate firm that serves as both the property owner and the building manager, utilizing a call center to support the high bar for service and scalability. Today, Pangea has over $250 million into 8,000+ apartment units throughout Chicago, Indianapolis and Baltimore, with the goal of continuing to expand within current markets as well as into new markets. Pangea has been highlighted by several media outlets including WGN TV, Chicago Magazine and the Baltimore Business Journal, among others. Pangea’s founder Al Goldstein has been named one of Crain’s 2013 40 under 40 and is a recipient of the Ernst & Young Midwest Entrepreneur of the Year. For more information, visit Pangea online at,, or on Twitter @PangeaRE.
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Claudia Maj