It’s been decades since negative leverage was a regular unwelcome guest in commercial real estate. Now it’s a trend again, according to Moody’s Analytics, between growing loan interest rates and cap rates.

For those in the industry who are too young to have knowingly felt the impact of negative leverage, the concept is simple. Whereas many will say the three ls of real estate are location, location, and location, it might be truer to say that they are more leverage, leverage, and leverage.

Erik Sherman

 

GlobeSt

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