Date: March 18, 2020
- For the first time since 2008, the Fed cuts interest rates to 0% | Link
- Wuhan closes last makeshift coronavirus hospital as China’s infection rate falls Link
- Dutch researchers discover COVID-19 antibodies | Link
As the coronavirus outbreak is greatly disrupting the economy, the federal government have adopted numerous policies to stimulate trade. Most notably, the recent interest rate cut to 0% has major implications for the real estate investor. While assets acquired during this uncertain period will produce more volatile cash flows in the short-run, as an investor, consider the impact locking in low interest rates will have on your investment economy over your prospected holding period.
In addition, there are significant refinancing opportunities, many lenders have instituted rate floors and are widening their spreads, however overall rates are particularly low. At Marcus & Millichap Capital Corporation, we have the breadth of experience and depth of market knowledge in investment properties and capital markets to flawlessly execute even the most difficult financing situations. Contact us for further details.
Although local governments are starting to cancel schools and issue shutdowns on various sectors of the economy, there are promising news.
The source of the virus, China has closed down its last coronavirus “pop-up” hospital as there are not enough new cases to support them, in addition, a 103-year-old Chinese woman has made a full recovery from COVID-19 after 6 days of treatment in Wuhan
. US stocks finished higher on Tuesday, staging a rebound after one of the most pessimistic days on record for the market in the prior session
While the length of this virus-induced period of uncertainty is unclear, there are signs of betterment, and a strong U.S economy backed by healthy long-term employment growth. In 2008, the unfavorable economic conditions benefited a great deal of diligent investors
. Just as before, this period of economic downturn presents the real estate investor with significant opportunities to capitalize on. Consider a low interest-rate acquisition, refinancing or striking a bargain on a property from a distressed seller.
The Marcus & Millichap Kabani Hotel Group hope you and your loved ones are staying safe, healthy and vigilant during these troubling times. Have a contingency plan ready, and remember that this will soon be but a chapter in our history books.