Hedging Strategies
Strategic guides and analysis on interest rate hedging approaches including caps, swaps, collars, and other instruments for commercial real estate portfolios.
Negative Defeasance - Use it or Lose it
Waiting until the loan is in the Open Period to prepay might mean losing out on the benefit of a negative defeasance penalty.
Defeasance
Mitigating Prepayment Penalties
In most cases, the moment a fixed rate loan is closed there’s a considerable prepayment penalty.
Other HedgesDefeasance
Defeasance Without The Premium?
Defeasance is a process where the real estate securing a piece of debt is swapped out for a portfolio of securities, typically US Treasury or Agencys.
Defeasance