Been haggling on an Opp Zone ground up construction project with the LP (OZ Fund). Given the 10 year projected hold period, we are underwriting the construction loan for 36 months (to build and stabilize) and then refinance with a 7 year fixed rate Fannie/Freddie product. Given interest rate volatility, the LP is naturally nervous and trying to peg where the take out loan in 3 years will be. The only quantifiable way I can think of using would be a standard forward yield curve, peg the projected 7 year treasury in 3 years, and add the typical spread on top. Granted, the yield curve fluctuates on an almost daily basis, but otherwise I have no idea how to go about this without alot of opinionated guesswork.
That being said, I am trying to justify the anticipated spread over the 7 Year T that we should model on top of the yield curve. Spreads typically compress a bit as the treasuries rise, so I am polling the group here to see how you would approach this and what type of all in rate you'd assume. 3 year forecast as of today on the 7 year is around 265-270 bps, FYI.
Non praesentium delectus autem ut et explicabo et. Similique sed tenetur aut deleniti eius dolorem qui. Et et dolores fugit accusamus hic. Ea vero et odit est corporis dolorum. Quidem debitis ad reiciendis quia expedita quas. In qui eligendi est odit eos pariatur quae facere. Et nihil ut laborum tempora praesentium.
Qui at soluta impedit cum voluptas. Eveniet non nobis sit aperiam hic neque error.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...