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Great Lakes Locking In $73 Mil of Debt

OAK BROOK, IL-Believing "extraordinary low" variable interest rates cannot last forever, Great Lakes REIT is locking in rates ranging from two to five years and at rates from 4.12% to 6.65%.

By Mark Ruda | Updated on November 02, 2001

OAK BROOK, IL-Faced with a jump in vacancies in its Midwest suburban office portfolio and a dearth of new investment opportunities, Great Lakes REIT is doing what many other property owners are doing – refinancing debt. Chief Financial Officer James Hicks says the company has received a commitment from an insurance company for five-year, 6.65% fixed-rate financing on $23 million of its debt, and expects to close in early December.

Additionally, the REIT hopes to complete two interest-rate swaps totaling $50 million next week. A two-year, $25-million swap will result in a maximum interest rate of 4.12% while a three-year, $25-million swap will result in a maximum interest rate of 4.71%, Hicks adds.

The time was right to capitalize on “extraordinary low short-term interest rates,” Hicks says, adding, “The temptation we’re faced with, these short-term variable rates won’t last forever. I don’t think anyone could honestly say interest rates will remain at these levels for the foreseeable future – although we wish they would.”

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