March Market Madness

The high expectations for a decrease in interest rates during the Federal Reserve's 4th quarter meetings were dashed last month due to a higher-than-anticipated inflation rate exceeding 3%. As a result, the Fed decided to pause on lowering the fed funds rate until the 3rd and 4th quarters of this year. This change in course has caused owners who were eagerly waiting to sell their assets to hold off, seeking further indications of rate decreases to maximize their asset values.

For experienced real estate investors, the reluctance to act and remain on the sidelines is maddening. Instead, those who are able to move are taking advantage of the properties currently on the market, with sellers needing to meet market demands due to impending loan maturities, required lease-ups, or overdue renovations. During this period of decreased transactions, lenders are also capitalizing on the current market conditions, earning fees with loan originations. In an effort to stimulate activity, lenders have begun offering enticing financing options such as lower spreads, interest-only programs, and no prepayment penalties, encouraging investors to refinance when rates drop.

The true opportunity for investors lies in seizing the current market conditions with higher Cap Rates, attractive financing options, and the potential for profits as rates decrease. Legacy West’s partners have successfully taken advantage of the current trends and identified several advantageous investments. Our partners have secured approval for several deals and anticipate closing these soon. We are continuously seeking to expand our network of partners, including those who have previously invested with us and potential new collaborators. We welcome all inquiries from those interested in joining our investment ventures.