The BIGGEST Opportunity in Commercial Real Estate in 2023

The BIGGEST Opportunity in Commercial Real Estate in 2023 // Floating rate loans became increasingly popular over the last few years, as interest rates dropped to record-low levels and many investors believed that rates would stay low (indefinitely).

But fast forward to today, and properties encumbered with floating rate debt have become some of the most at-risk deals in the entire commercial real estate market, with the 30-day average SOFR (or the interest rate index used to benchmark many floating-rate CRE loans) jumping from less than 10 basis points back in March to over 300 basis points less than nine months later.

So to break down how this is impacting the CRE market today (and the opportunities that might arise as a result), in this video, let’s walk through how floating rate loans are affecting deals right now, what might happen if rates continue to rise (or even stay at current levels), and how this might ultimately create a significant amount of buying opportunities for commercial real estate investors in the next 12-18 months.

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🕒 Timestamps 🕒
0:00 Introduction
1:12 What Are Floating Rate Loans?
3:23 How This Plays Out In Practice
5:20 Refinancing Restrictions
6:22 Where This All Leads
7:50 How To Be Ready When Opportunity Strikes

#commercialrealestateinvesting #realestateinvesting

*Nothing in this video should be construed as tax, legal, accounting, valuation, or financial advice or recommendation. All information in this video is intended solely for educational purposes, and you are advised to consult with your own personal professional advisors regarding your personal investment decisions.

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Research and articles referenced in this video:
https://www.recapitalusa.com/aggressive-fed-rate-hike-puts-short-term-damper-on-floating-rate-cre-lending/
https://fred.stlouisfed.org/series/SOFR30DAYAVG