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CHICAGO-It may be too early to call it a trend, but at least one multifamily rental REIT boss thinks higher interest rates may benefit companies like his AMLI Residential. Anecdotal evidence suggests highly-leveraged buyers have begun pulling back from deals in the wake of a sudden spurt in interest rates, says president Allan J. Sweet in a recent earnings conference call.

“The current run-up in mortgage rates…within the next two to three months, will make the acquisition climate better for the better financed companies as opposed to the more highly leveraged buyers,” Sweet says.

Sweet adds it is too early to tell if what he has seen in a smattering of potential deals is a start of an industry-wide trend, or whether it will translate into higher capitalization rates being paid for assets that are on the market. Meanwhile, AMLI Residential continues to find the acquisition market “very difficult” for properties that have been widely marketed.

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