As commercial real estate investors make future projections, they may be overestimating the interest expense for their debt, according to Andrew Thornfeldt, managing director at Chatham Financial.
In a recent Chatham Financial webinar, 60% of attendees answered that they use the forward curve to project future interest rates. But Thornfeldt thinks they may be overestimating their costs if they rely on the forward curve to make their debt and derivatives decisions.
"Historically, rates have just never followed the forward curve, and they've deviated from the forward projections in a meaningful, material and predictable way," Thornfeldt says.
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Leslie Shaver
Les Shaver has been covering commercial and residential real estate for almost 20 years. His work has appeared in Multifamily Executive, Builder, units, Arlington Magazine in addition to GlobeSt.com and Real Estate Forum.
