Since September, the Federal Reserve has reduced the Fed Funds rate by 75 basis points, bringing it into a range of 4.50%-4.75%. While many anticipated that these cuts would lead to cheaper borrowing costs, the commercial real estate industry has experienced the opposite effect. Since the first rate cut on September 18th, the 10-year U.S. Treasury yield has risen by 64 basis points, pushing up borrowing costs for various commercial real estate lending products. Why did this happen? Despite concerns about the health of the U.S. economy, recent economic data has been strong. Third-quarter GDP figures indicate that the economy remains in an expansionary phase, which is putting upward pressure on U.S. Treasury yields, therefore making borrowing costs on commercial real estate more expensive.
As yields fluctuate, "current rates" quickly become obsolete. However, spreads remain applicable and fitting to deal characteristics. Though rates are important, having a well articulated and defined debt plan matching your long-term investment plan is vital. The experts at CommCap are here to help you understand goals and navigate the current market providing access to multiple lending sources, early rate-locks, cash out refinancing, and more.
As your exclusive advisors, CommCap utilizes proprietary systems, market expertise, and years of experience to secure aggressive financing options that best fit your property. Exclusive correspondent and servicing relationships with Life Insurance Company, CMBS, and Agency lenders ensure a broad and in-depth representation of current market conditions. Our team of advisors craft a loan structured to enhance revenue and allow you to focus on increasing cash flow.
We do not list, sell, manage, or lease property. We only arrange financing and are the best at what we do.
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