That anguished cry you heard from the capital markets during the week was the result of the California Public Employees’ Retirement System (CalPERS) announcing that it would no longer invest in hedge funds, saying they were too time-consuming and too complex, and had produced unsatisfactory rates of return. Could real estate be next?
The Trepp survey for the week ending September 12 showed average spreads coming in about 5 basis points. The implied rate for ten-year, modestly leveraged commercial real estate mortgages was 4.0 percent, 64 basis points lower than year-end 2013. It remains a great time to be a borrower.
The Trepp survey for the week ending September 5, 2014, again showed average spreads literally unchanged as the markets got back after the three-day holiday weekend, rested and ready to take on the world’s challenges. If you are planning financing and/or refinancing this year, now is the time to put the pedal to the floor.