Timing the Market Perfectly is Nearly Impossible

The 10 year UST has come down over 25 basis points. Spreads have not adjusted, so kudos to those locking in a lower rate. How much further do rates need to drop for you to transact?

The Fed is hinting at a lower Fed Funds Rate in response to a slowing economy and higher unemployment. Will either of those help your tenants sales, rental rate increases, or property values?

Our life company rates are low, some in the high 5% range. However, property values are moderating and lenders have become more conservative. Some CRE owners are rolling the dice. If the Fed cuts a quarter in September, which is not a foregone conclusion, they may cut again at the following meeting. They may also just hint at future cuts to calm the markets. Don't get caught waiting on the Fed to finish cutting.

If you have a loan maturity, or lease maturities, coming up this year or early next year, make sure to leave yourself enough time to find and close a loan.

Don't get lulled into achieving a greater reduction in rate, at the cost of lower proceeds or a potential maturity default. Getting short term loan extensions may become more difficult, now that the regulators are on the hunt for impaired loans in an effort to keep banks solvent.

Borrowers need to consider the risks of waiting on rates to drop further, less than 100 days before our presidential election, with the Central Bank of Japan hiking rates, and our media ignoring the fundamental issues underpinning our economy.

Don't take access to capital for granted. Capital is abundant now. I understand that rates are compressing CRE returns in a way most borrowers were not prepared for. All I am suggesting is that you don't wait too long to refinance your debt because the Fed’s moves are hard to predict. Their next meeting is September 17. Call me at 305-725-059 if you're ready to act. Schedule a 15-minute complimentary consultation via this link. https://calendly.com/michaelbalan/