BOSTON, MASSACHUSETTS (February 21, 2023) – Jeff Munoz, vice president of Northmarq’s Boston debt/equity team, provided France Media’s Northeast Real Estate Business with responses for their 2023 Lender Insights. The special section features direct lenders and financial intermediaries from across the region who cover the challenges and opportunities in the year ahead, factors most affecting the lending environment and the property sectors to watch during 2023.
Northeast Real Estate Business (NREB): Are commercial real estate borrowers more interested in fixed- or floating-rate finacning today versus a year ago and why?
Munoz: Commercial real estate borrowers have been more interested in floating-rate loans today versus a year ago given the point in where the Federal Reserve is in its rate hikes. Expectations are that long-term rates will continue to fall versus short-term rates. Borrowers want the flexibility associated with floating-rate loans to take advantage of cheaper, longer-term debt in the near future.
NREB: If the U.S. economy does fall into a mild or moderate recession in 2023, which property type(s) stand to weather the storm the best and why?
Munoz: Historically, multifamily has weathered the storm well during recessions compared to other property types. The country needs more housing, and even throughout COVID, we continued seeing apartments reporting high occupancy rates. In a recession scenario, apartments will continue to have stable demand.
NREB: Are there any common questions you are fielding from borrowers today, and if so what are they and what advice are you giving them?
Munoz: Borrowers inquire about taking advantage of their current loans on swaps or defeasance from the past couple of years. Refinancing might be the best way to take advantage of large rebates against its loan balance in a less-favorable sales environment.
Read Munoz’s contributions in Northeast Real Estate Business.