How many ways can a CRE borrower say out? How about a good factor of ten when it comes to interest caps on adjustable-rate commercial real estate loans?
"In the last 18 days, I had about a billion dollars of real estate I was trying to buy," Grant Cardone, CEO of Cardone Capital, tells GlobeSt.com. "We were doing a deal with $300 million worth of debt, AAA asset, AAA location, everything lenders would want. What we would normally pay $500,000 for was $12 million." The deals were done … done in, that is.
It's not the current size of interest rates, but the anticipation of what they Federal Reserve has said it would do over the next 12 to 18 months that has lenders racing for protection. And the more protection a borrower wants in a 12-to-24-month window, the more it's going to cost.
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