Let’s face it—since the Global Financial Crisis of 2008-09, interest rates around the world have been very low, encouraging entities to take out more and more debt at a low cost. Now, a lot of real estate loans are maturing and interest rates are expected to be ‘higher for longer’, to take the popular expression. Uman noted that it’s all about the underlying asset, that is, if the underlying asset is an old office in a secondary or tertiary market, then there are structural issues and holding that debt may not be beneficial. At the same time, if someone is looking at a multi-family home and the asset is performing, then debt taken out against it may not be as problematic.
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