Andrew Thornfeldt, managing director at Chatham Financial, thinks investors are over-reliant on the forward curve when trying to understand where interest rates are heading.
"Over a 10-year period, since the creation of LIBOR, it's never been more advantageous to enter into a fixed rate swap versus floating on LIBOR," Thornfeldt says.
Over a five-year period, it has only been more advantageous to go fixed rate 11% of the time, according to Thornfedt. "So we're looking at a pretty extreme benefit to going floating over fixed at least as it relates to swaps versus LIBOR over longer periods of time," he says.
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Leslie Shaver
Les Shaver has been covering commercial and residential real estate for almost 20 years. His work has appeared in Multifamily Executive, Builder, units, Arlington Magazine in addition to GlobeSt.com and Real Estate Forum.
