In light of the looming Greek/Puerto Rico catastrophes, I was talking to a counterpart at another company about surprising rates we've seen. Figure it would be interesting to have a thread showing rates from recent deals that have been completed---both surprisingly high and low rates.
Two months ago I saw a 95% leased Class B++ Office building in a major CBD and a 5.75% cap get financed by a bank at 3.02% fixed 10 year term 25 year amortizing 70% LTV. Didn't have access to DSCR but I imagine it wasn't much higher than 1.30.
What else have people seen recently? I have the feeling things are about to change a little bit. I don't think the world is going to end but I'd prefer not to float my rate right now.
imo, there will be a 'flight to quality' and US rates will fall in the near term. had a loan lock rate today and was significantly lower than last week due to this.
As people "flock to quality" yellen will hike the fed rates. But I do agree to the "Safe Haven" factor/aspect of US paper.
I don't understand your statement - 'As people "flock to quality" yellen will hike the fed rates"...the FED works to stabilize inflation and the economy, it would not raise rates during an international economic crisis?...
The FED has signaled that it may raise rates at the end of 2015 although most economists predict it will happen in 2016. The real question is, how does the rate rise affect the market's appetite for real estate transactions and thus the supply/demand dynamic of lending to those transactions...which, no one knows. However, rates are near historical lows now, and if you don't lock rate today and it rises tomorrow, what is your excuse to investors?
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