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LOOK AHEAD 2023: CRE debt market holds out hope for more clarity, stability
Whichever case scenario plays out, the interest rates will keep imposing a significant impact on the real estate capital market.
“My personal opinion is, the interest rates will continue to increase,” said Rob Gilman, partner and co-leader of Anchin’s Real Estate Group. “I don’t think we’re going back to the low interest rates [like] in the 4% or even the 2.8% mortgage [rates] that were out there about a year ago.”
Unless borrowers need to refinance debt, they will not.
“The only reason to refinance now is if you can refinance an amount equal your existing mortgage. With rising rates and expected decreasing valuations, there is a likelihood that you may not be able to refinance for the full existing amount of the mortgage down the road. ” said Gilman, adding that refinancing can be the last option under the current interest rate environment.