The cost of in­sur­ing com­mer­cial real-es­tate loans against a rise in in­ter­est rates has ex­ploded over the past year, rais­ing the prospect of a mar­ket sell­off since many prop­erty own­ers will no longer be able to af­ford these hedges.

Nearly half of all com­mer­cial prop­erty debt is float­ing rate, ac­cord­ing to a 2019 re­port by the Mort­gage Bankers As­so­ci­a­tion. Lenders usu­ally re­quire that these bor­row­ers hedge against an in­crease in bor­row­ing costs, through a de­riv­a­tives con­tract known as an in­ter­est-rate cap that lim­its a bor­row­er’s ex­po­sure to ris­ing in­ter­est rates. 

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About HGI

Harbor Group International (HGI) is a leading global real estate investment and management firm. With $20 billion1 in real estate investment properties, the firm invests in and manages diversified property portfolios including office, retail, and multifamily properties. With over 38 years of experience in the industry and approximately 1,400 employees worldwide, HGI continues to look for real estate investment opportunities.

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Harbor Group International controls $20 billion1 in real estate investments and is constantly exploring real estate investment opportunities in the worldwide market.