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CRED iQ Launches Dataset on Adjustable-Rate CRE Debt

CRED iQ, a data, analytics and valuation platform serving the commercial real estate (CRE) finance and investment communities, announced an expansion in the company’s core data to include adjustable-rate CRE debt. The platform analyzed floating-rate loans securitized in the Commercial Real Estate Collateralized Loan Obligation (CRE CLO) universe and isolated key parameters of interest rate cap agreements. Depending on client perspective, interest rate cap agreements can be a source of credit risk or serve as a basis for opportunity in prospecting and closing CRE transactions.

Loan cap agreements have skyrocketed in value (or cost) as interest rates have climbed. While floating-rate loans face challenges in today’s marketplace, the rate cap agreements represent a potentially meaningful asset. Investors, owners and brokers can monetize these instruments and thereby create significant value in a CRE transaction.

“Interest rate cap agreements in our dataset have termination dates ranging from 2023 to 2026. Of those rate cap agreements with expiration dates in the next four years, 40% have expiration dates that occur prior to respective loans’ maturity dates,” said Marc McDevitt, senior managing director of CRED iQ.

CRED iQ’s enhanced dataset covers approximately 700 rate cap agreements that provide $30 billion in protection. The curation of the dataset was preempted by client demand and identified as a necessity in the current interest-rate environment.

“Floating rate and bridge loans represent some of the most challenging territory faced by CRE owners and investors,” said Mike Haas, co-founder and CEO of CRED iQ.  “There are also opportunities within the loan structures that we have attempted to unlock in our latest release.”