Real Estate Focused. Real Estate Driven.
Pensford is the only interest rate advisory firm focused exclusively on commercial real estate. Each owner and developer has unique needs. Each project has different objectives, risk tolerances, and disposition plans. Shouldn’t the interest rate strategy be as customized as your plans for the asset itself? By focusing on building long term relationships, Pensford can deliver unbiased advice specific to each borrower’s needs and objectives.
Customized Strategies
- Rather than simply hedging the full amount for the full term, are there alternatives that can strike a balance between protection, cost, and flexibility?
- We work with borrowers to quantify potential prepayment scenarios, including shocks to the forward curve.
- Let’s quantify the cost of rate protection in given rate scenarios. Meaningful dialogue around Fed monetary policy and Treasury movements to make an informed decision.
- Quarterly checkups to determine if further discussion is warranted. Has something changed in the interest rate market or have disposition plans changed that should prompt more in-depth analysis?
Required Hedges
- Agency lenders, debt funds, and other short term financing providers commonly require interest rate caps as a condition of closing.
- Pensford carefully reviews structural requirements to quantify incremental costs associated with each additional month as well as rating charges that may limit the pool of participating banks.
- Some lenders allow a springing cap provision whereby the cap is not required until LIBOR exceeds a certain level. Pensford provides analysis to help determine when the best time to purchase the cap could be, as well as monthly automated updates to ensure no surprises.
- The entire cap process must be managed carefully to ensure a smooth closing. Pensford has arranged more than 2,000 caps since inception and is one of the leading placement agents in the country.
For Brokers
- Pensford works with all major brokerages and has developed a reputation for delivering seamless closings and full transparency.
- Your closing is as important to us as it is to you. We appreciate you trusting us with your relationships and take that responsibility seriously.
- We will help you win the deal, not focus on our involvement. We work with brokers with no expectation of being engaged on a transaction. If you need a dozen pricing scenarios, that’s a dozen ways for us to build a relationship.
Rate Talk
- We love talking rates – call us! We don’t need a transaction to talk shop. Talking rates with borrowers is the best part of our job.
- How will Fed monetary policy affect your Interest expense? What technical factors are driving interest
rates? - We love discussing topics that never seem to make it into popular headlines.
- Not a single PhD among us, so we can’t talk over your head. Check out our newsletter if you don’t believe us. Irreverent? Yes. Sarcastic? Oh yeah. Insightful? Debatable. Intellectually elitist? Never.
- We love talking rates almost as much as you love locking them.
