In recent weeks, it has become increasingly clear that interest rates are going to remain high for longer than most commercial real estate owners initially expected, and they are going to be forced to pay millions in additional expenses as a result. Not only is there a wave of loans maturing soon that owners will be forced to refinance at much higher rates, but many also face looming expirations on the agreements they reached to hedge against the rising interest rates. These agreements, known as rate swaps and caps, allow borrowers who took out floating-rate loans to keep their interest expenses lower, but they only last for a certain period of time, and for many owners, that time is running out. 
These expirations will force borrowers to pay higher rates, in some cases double their previous rate, or enter into new swap contracts that have become much more expensive. With billions of dollars in loans and swap contracts set to expire, these added costs could impact owners across commercial real estate,… Read the full story here. | 
