Lone Star Court

We have been in a low interest rate environment for the length of the current business cycle, and yet somehow, rates today are even lower than they were 12 months ago. While the market has grown accustomed to low interest rates, they are no guarantee, and some capital markets experts are advising their clients to lock in long-term, low-interest rate financing.

"We are arguably in the lowest interest rate environment in history," David Sonnenblick, a principal at Sonnenblick-Eichner Co., tells GlobeSt.com. "Borrowers want to take advantage of this opportunity as opposed to taking the risk of a rise of interest rates and having to refinance their assets in a higher interest rate environment." The firm recently refinanced the Lone Star Court, a 123-room boutique hotel in Austin, in a deal that fits into this trends. It secured a CMBS loan, funded by a Wall Street investment firm with a 3.49% interest-only 10-year term.  On behalf of the borrower.

The good news is that almost all borrowers could take advantage of the current rates. Elliot Eichner at the firm says, "any borrower who has an interest in taking advantage of long-term fixed rate mortgages at extremely low interest rates," is a good candidate. "This includes borrowers with existing debt and prepayment costs associated with paying off their current loan. The savings in debt service with a new low cost mortgage could pay for the costs associated with this prepayment over the first couple years of a new loan," he says.