Negative leverage looms for sponsors as cap rates, interest rates diverge

By Kevin Olds | October 26, 2022

 

Real Estate Capital USA

Edward Fernandez, president and CEO of 1031 Crowdfunding, speaks about how the market is adjusting to negative leverage as investors accept lower returns with Anna-Marie Beal of Real Estate Capital USA. “When you borrowed money 90 days ago, you were able to get positive leverage – the rates on loans were lower than what the real estate was producing. That has now inverted, making it difficult to create current cashflow for investors now,” said Fernandez.

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