Low interest rates arefueling retail refinancing activity. There is strong demand forrefinancing deals as these owners are looking to lock in lowinterest rates, and many owners are able to reduce their currentrate by 100 basis points. The deal makes sense for many owners ofretail assets, who are able to increase cash flow as a result.

"With interest rates still at record lows, we are seeing a highvolume of landlords continuing to take advantage of refinancing,"Ben Townsend of SRS Real EstatePartners' debt & equity team, tells GlobeSt.com. "Manyof our clients have been able to reduce their rate by more than 100basis points while also pulling out additional equity to invest inmore opportunities. Often times, even if an owner can lower anasset's existing rate by 50 basis points, it still makes sense tolook at the increase in cash flow after re-amortizing a loan."

Retail owners interested in refinancing with the new low rateshould have a professional run the numbers to see if it makessense. "For example, if an investor secured a $10 million loan fiveyears ago at 5% on a 25-year amortization, the yearly debt serviceis $701,416," says Townsend. "Over the course of 5 years the ownerwould have paid down $1,141,981 of the principal balance. Now, with$8,858,018 remaining on that loan, the debt service is still$701,416 per year. Therefore, if an owner refinances that balancetoday at 3.75% with an interest only loan, they would only pay$332,175 per year in debt service, a savings of about $370,000 peryear."