RECI Finds Bond investors expecting quick economic recovery

 

John Oharenko

Chicago, IL – The Real Estate Capital Institute® (RECI) states that characterized by brutal weather for most parts of the nation, the second month of the year finished with slightly higher rates and widened mortgage spreads between short and longer-term debt.  

Bond investors expect quick economic recovery and gain more comfort with the new administration's policies on wage growth and government spending mandates. 

As a result, higher yield expectations prevail, translating to treasury rates of about a quarter-point for shorter-term debt and forty basis points for long-term debt.

 Apartment financing programs represent the tightest mortgage spreads in the commercial property industry.  Low-leverage loans of 55% or less provide pricing starting in the mid-two-percent-range for five-year terms and a half-point higher for ten-year debt.  

Conversely, higher-leverage debt approaching 80% LTV starts in the lower-to-mid-three-percent range.  Other commercial properties generally feature pricing beginning in the mid-three-percent level with exceptions for lower-leverage prime assets.

All-in-all, fund availability remains high as lenders seek new loan opportunities but find few options – especially for strong-performing assets.

 The Real Estate Capital Institute's director, John Oharenko, advises, "2021 should continue to show improved property performance, as markets recover from the pandemic."

 The Real Estate Capital Institute® is a volunteer-based research organization that tracks realty rates data for debt and equity yields.  

    CONTACT:

John Oharenko 

john.oharenko@reci.com

 Executive Director

^The   Real Estate Capital Institute^®

Chicago, Illinois USA 60622

director@reci.com / www.reci.com