Borrowers are facing a more challenging environment. Treasury yields are rising and the Federal Reserve increased the target federal funds rate by 75 basis points at the FOMC meeting July 15.
“Due to the rapid rise of interest rates and inflation after an extended period of record-low rates, many lenders are proactively widening spreads, especially on riskier investments,” said Andy Peltz, co-executive chairman at iBorrow, a nationwide direct lender for commercial property bridge financing, in an interview with IREI. “We anticipate some volatility in the coming months with pricing rising.”
Despite the volatility, hotel financing is seeing a rebound as travel has picked up.
“According to the Mortgage Bankers Association, hotel property loan originations saw the greatest year-over-year increase of all sectors at 359 percent,” said Peltz. “As travel has started to pick back up and hospitality rebounds from the effects of the pandemic, we will continue