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This may be the time to refinance real estate loans, so says Arthur Adler, managing director of Jones Lang LaSalle Hotels, a lodging-industry advisory group. The most commonly used index for such loans is the ten-year Treasury, which has dropped below 6% since April, almost a full point below May when rates spiked. During the last few years, the index has experienced some volatility due to the Asian currency crisis, inflationary worries and fears about disruptions that may have resulted from the Y2K software problem. Still, the Treasury remains the bellwether for real estate loans.

The index reached a low of 4.5% in October 1998, but has risen steadily. Six months ago, it peaked at 6.8%, but since then has fallen, reaching 5.77% on August 14. That decline is attributed to moderating inflation. .

Labor costs represent about two thirds of business expenses, and there has been some positive news from this sector, says Alan Tantleff, Jones Lang senior vp. US Labor Department figures indicate that the unemployment rate remained unchanged during July and businesses added fewer new jobs than expected. In addition, expectations are that the Federal Reserve Board will not raise interest rates at its August 22 meeting, he says.

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