The pandemic brought interest rates back down to historic lows, and while investors are enjoying the low cost of capital, many are wondering when the party will end. Berkadia's Charles Foschini, however, says that investors need not be so focused on interest rates, which are scheduled to rise next year, but are only one metric of an investment deal.

"Investors need to be focused on the trends that make an asset successful and the business plans of the operator.  If an asset is impaired, or otherwise ill-designed, or a market can't perform, or the operator is under-capitalized, the interest rate isn't relevant," Foschini, senior managing director of mortgage banking at Berkadia in Florida, tells GlobeSt.com

There is some uncertainty about where rates are heading. Foschini expects interest rates to stay low at least through next year, but spreads could compress. "I expect interest rates to stay low in 2022 and if the underlying indexes spike as many believe, I believe that spreads will tighten. In my opinion, spreads have been fat this entire cycle because the indexes have been so low," he says.