1031 buyers are generally more motivated and will pay more for a property than buyers that are just acquiring as a normal course of business. Additionally, due to their massive tax deferral and tight timeline to exchange, they play fewer games and use fewer tactics to renegotiate.
This unique incentive and incredibly low interest rates, which are down roughly 30% in 2019, have combined to form a perfect storm to get you absolute TOP DOLLAR right now.
Yale Advisors can do an off-market, private sale, or a call for offers with a proper bidding process depending on your timeline and motivation level. Keep in mind, a full process will ALWAYS yield more than selling your property off-market.
If you are not interested in sale, than refinancing or pulling cash out at these incredible rates may be ideal. For the first time in several years we are seeing rates dip into the mid-to-high 3%’s for the best properties at higher LTV’s. There are a very wide variety of lenders from Fannie/Freddie, to life insurance, conduit/CMBS, and even still a number of banks. Contact Chris San Jose today for more details and a free rate and loan analysis. Many experts believe this may be the last window to take advantage of these incredible rates.
Treasury yields plunged this week, falling as much as 20 basis points over the past 5 days in 5 year rates and roughly 18 basis points across the rest of the curve. The entire treasury now sits below the effective federal funds rates and below the lower bound of the Fed Funds corridor at 2.25%.
Economic conditions remain favorable and low interest rates have created an outstanding environment for investors to buy and sell properties. This week’s rate cut is giving commercial real estate investors more confidence in the economy. Underlying property fundamentals remain strong, the cost of capital remains low and investors still have a plethora of capital that they need to deploy. One thing on the mind of investors is how the fed position on rates and the recent decline in the 10 year treasury could impact cap rates. Overall, cap rates have remained unchanged for the past couple of years, moving around 20 basis points. Despite the dip in the treasury, there is not much room for cap rates to move lower. The majority of people don’t have the risk tolerance that would be needed for rates to compress further.
Over the next 12 – 18 months it’s more likely the Fed will raise rates again before they make any moves to cut rates.