Rates Continue Dropping

At the last Central Bank meeting in late March, FED announced they will there will be no more rates hikes in 2019! Following the announcement, Interest rates in the open market fell to a 13 Month Low, as the capital heavy lenders begin to compete for the business. This prompted a big discussion in our office and we got to thinking how we can help our clients materialize on the low interest rate market, these are the top three suggestions:

• Long-Term View – invest in property you can hold long-term, as we go through the economic slow-growth period, and lock in 7 or 10 year loans. We recently obtained quotes at 4.13% and 4.34%, with options for Interest Only lock-in period and non-recourse. We have also seen rates in NYC drop to 3.99% on some Multi-Family deals

• Borrower’s Market – Review your portfolio for potential refinances and see where you can unlock value. By lowering interest rates on your loans, you can pull additional capital out while keeping the payments same or close to same. It’s a competitive market amongst Lenders right now, so remember to ask for better terms. Chances are you will get them! 

• Patience – keep in mind that asset prices are still riding high on the wave of the last cycle’s expansion. Look for intrinsic value and strong fundamentals, with strong focus on dense locations (lenders like to see density around the property of at least 100,000 within 5-mile radius