Chris Moore and Karolina Brzozka find solutions to reduce hedging costs on floating-rate debt in GlobeSt.com
For some structures, cap costs are as much as 20 times more expensive than they were a mere six months ago.GlobeSt.com
It has been an eventful few months in the interest rate markets, with commercial real estate borrowers facing a much steeper forward curve and increased market volatility, both of which have contributed to significantly higher premiums on interest rate caps. For some structures, cap costs are as much as 20 times more expensive than they were a mere six months ago.
That sticker shock has led to a very common question: what are some creative solutions to ease the burden of that upfront cap cost?
Our interest rate risk expertise
Interest rate risk can be an important factor in the performance of a single real estate asset or a portfolio of properties. Chatham’s interest rate risk management advisory services offer the expertise and knowledge you need to make informed decisions about the type of debt you use and how you manage the interest rate risk associated with that debt, whether it’s risk on current floating-rate debt, refinance risk on fixed-rate debt, or risk on prepayment penalties.
With Chatham on your side, you can be confident that you’re getting the best possible terms, while maintaining the integrity of your all-important banking relationships. We provide complete guidance on strategy and execution, along with access to tools for monitoring the hedge for the life of the transaction.
Our highly experienced professionals, supported by industry-leading technology, ensure the best pricing, maximize transparency, and offer you insights into market trends.
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