CRE Investor Looking To Lock In Rates? The Time Is Now

<p>For commercial real estate (CRE) investors looking to lock in rates, the time is now.</p> <p>Thirty Capital Analyst Bryan Kern foresees the market being range-bound for up to the next four weeks—at least until the Feds start tapering.</p> <p>“If you’re looking at forward exposure, I like 18-months to 24 months forward for six and seven-year tenors,” says Bryan.</p> <p>“I think we're going to see two things. I think we're going to see rates go up, but the Fed's not going to mess with the short end of the curve for a while. So we're going to see the yield curve steepen. We've even got some clients that are looking at four-year forward two-year (swaps).”</p> <p>Bryan and Thirty Capital CEO Rob Finlay discuss borrowing examples that they are currently recommending to clients, along with attractive offers from banks.</p> <h1>Why So Much Focus On The Short And Long Curve?</h1> <p>Some listeners have asked why Thirty Capital’s CRE Capital Markets Report discusses the short and long curve so much, and who cares about the Ten-year? After all, the Fed is controlling both the short end and the long-term curve, so it’s pegged.</p> <p>Bryan agrees that the Fed does buy across the curve, so to some extent they do manage the long end.</p> <p>However, he adds that the Treasury market is a big one, and it’s not just the Feds who are buying. And that’s why the show focuses on this issue.</p> <h1>Feds Interfering In Open Market</h1> <p>Right now though, at this point in time, all eyes are on the Fed as they are essentially in control of the Ten-year.</p> <p>“They can pretty much do what they want with it,” says Bryan. That’s why tapering is such a big issue right now. The question is, when do the Feds stop buying?</p> <p>“When do they stop what I consider interfering in the open markets? The big thing is that at next week’s meeting (will) they mention taper? There's a lot of people who are pressuring the Fed to actually implement the taper this year and finish it pretty quickly . . . some are saying by June of next year, which w