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GlobeSt.com EXCLUSIVE: C&W Foresees Steady Interest Rates

NEW YORK CITY-Even if interest rates were to increase 50 or 100 basis points over time, Libor and 10-year Treasuries would still be at historically low levels, according to Jon Caplan, executive director of C&W.

By Melissa Kress | Updated on January 27, 2004

NEW YORK CITY-With the Federal Reserve policy makers meeting this week, industry leaders are standing by to see what action, if any, they will take on interests. More importantly, real estate professionals are waiting to see what effect that action will have on a commercial real estate.

However, most experts agree interest rates will remain the same–until at least the latter part of the year. “Most economists anticipate interest rates will remain unchanged,” says Jon Caplan, executive director of Cushman & Wakefield in New York. The belief holds true even in light of the recent job growth. “In December 1,000 jobs were created and in the current economy there has been no sustained period of job growth,” he adds. In addition, with the presidential election coming up in November, Caplan does not foresee any increases to the interest rates in the near term.

Aside from short-term interest rates, Libor, which is applied to floating-rate loans, and 10-year Treasuries, which are applied to fixed-rate loans, remain at historically low levels, he explains. With one-month Libor trading at 1.1% and six-month trading at less than 1.2%, and 10-year Treasuries trading just above 4%, investors who are applying leverage have access to a great source of capital, he says. In fact, even if interest rates were to increase 50 or 100 basis points over time, they would still be historically low, according to Caplan.

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