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…