Another week, another 75 basis points mounted onto the Federal Reserve's benchmark interest rate—and the more that all commercial lenders will eventually be charging.
That's tough sledding in summer for commercial real estate. Variable rates get reset, refinancing gets more expensive, and there may be deals that are no longer viable.
Marcus & Millichap has a new report on hedging techniques, specifically interest rate swaps and caps. "The Federal Reserve's commitment to raising interest rates, renewed by higher-than-anticipated CPI inflation in May, has brought these options back to the forefront of many borrowers' minds," the report noted.
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