How Will Interest Rates Impact Real Estate Investment?

Deals are getting done, even in these turbulent and uncertain market conditions.  The key is telling the best story and knowing where to go.  Each transaction is unique and our 30+ years of experience helps you find that "Perfect Source" that can make or break a deal.  We can help get that extra 10-20 basis points reduction in interest rate, Full Term Interest Only, Non-Recourse, Maximum Proceeds, or whatever it takes to make the deal work.  If the shoe almost fits, wear it!

Long Term Rates Are Still Near Historical Lows
  • The Fed only controls short term rates and we have to ask why rates aren't already at 4% or more? The Market has already factored in Inflation and Fed short term rate bumps.
  • The answer has to be continued strong liquidity across all sectors chasing yield and putting downward pressure on risk adjusted returns.  3%+ returns on the US Treasury look pretty good right now compared to other alternatives.
  • As much as the Fed will try to control longer term interest rates they can't.  The Market will control them.  The 10 Year Treasury is like a betting line in Las Vegas - it is where it is because half of the Investor Universe think it is going up, and half are betting  it is going down, but there is volatility every time new information comes out.
  • Here is a great article on how cap rates have tracked interest rates historically and the results are surprising. Click to View Article
 How to Operate in the Current Marketplace?
  • Create certainty when you can, and don't gamble on where rates are going.
  • If a deal works it works, and if it doesn't it doesn't
  • Have the discipline to "not make a mistake"
  • Model your numbers with conservative leverage and factor in some level of decreased income
  • If you can find the "Value-Add," "Off-Market," or "Development" Deal that pencils, those deals still work, but are hard to find.
 To Help Navigate these uncertain times, CCP Can Provide Proactive Financing, Consulting and Asset Management Strategies:
  • Bridge and Permanent Non-Recourse Debt
  • Joint Venture and Preferred Equity 
  • Recapitalizations, Credit Lines, Access Trapped Equity, Lender Negotiations, Maximize Cash Flow, Preserve Capital. 
  • For a Confidential Analysis of your Capital Needs please contact us.
Recently Closed Transactions:

$12.5M Refinance - Garden Style Affordable Multifamily – 2.95% fixed for 10 years, Interest Only for 5 years, 95 units, 60% LTV, Non-Recourse
$28M Acquisition Financing – SOFR + 2.25%, 75% of Acquisition Price, 7 year loan, Interest Only for 3 Yrs – 225,000 SF, 100% leased

For a more detailed list of transactions, Click Here