CRE Debt Advisory
CRE Debt Advisory
The first choice in defeasance, interest rate hedging, and yield maintenance services.
We act as your debt management advisor, leveraging our extensive market knowledge in structured finance and interest rates to optimize your debt and enhance portfolio performance.
Since 2000, we have:
Be Proactive, Not Reactive
Managing debt across a CRE portfolio isn’t just complex – it’s high stakes. With rising debt costs, compressed maturities, and tighter liquidity, staying ahead takes more than static reports and outdated spreadsheets. Our recurring Debt & Risk Analysis report (i.e., Debt Scorecard) provides quarterly snapshots to help firms manage risk, maximize returns, and stay ahead of rising costs and tight liquidity.
Real Deals. Real Impact.
Proactive debt management is essential to protecting cashflow, maximizing returns, and avoiding costly mistakes.
$613k at Risk: Floating-Rate Loan Without a Cap
Deal -
Asset: 240-unit multifamily
Loan: $19.8M bridge, originated Q1 2022
Rate: SOFR + 3.75% (floating)
Term: 3-year interest-only, no rate cap
Planned Exit: Refinance or sale in 2025
What Went Wrong -
Sponsor declined to buy a rate cap at 3.0% for ~$287k. SOFR rose from ~0.25% (Q1 2022) to 5.3%+ by mid-2023.
Impact -
SOFR Increase: +4.0%
Total Interest Paid (No Cap): $4.7M
Interest with Cap: $3.8M
Savings if Hedged: $613k
Result: Distributions were wiped out, and the deal was at risk of breaching covenants.
$428k Missed Savings: Fixed-Rate Loan Without Supplemental Total Cost of Capital Reduction
Deal -
Asset: 300-unit multifamily
Loan: $22M Fannie Mae
Rate: 3.75% (fixed)
Term: 10-year
Preferred Equity: $4M at 8% pref
Year 2
What Went Wrong -
Sponsor never replaced costly pref equity despite NOI increasing 22% (2021–2023), which supported a $3.5MM supplemental loan at ~6.25%.
Impact -
Pref Equity Payments (without Supp.): $960k
Supplemental Loan Payments (I/O): $656k
Pref Equity Payments (with Supp.): $120k
Missed Savings: $184k over 3 years
Missed Extended Term Savings: $428k total over 7 years
Result: Refinancing $3.5M of pref equity with a supplemental loan in 2021 could have saved $61k annually, improved cashflow, and accelerated the promote.
$646k in Savings: Hedging Done Right
Deal -
Asset: 180-unit multifamily (value-add)
Loan: $16.5M bridge
Rate: SOFR + 3.25% (floating)
Term: 3-year
Rate Cap: 3% SOFR cap purchased at origination on 01/2022 (Cost = $46k)
SOFR Rise Protected: 01/2022 to 12/2024
Outcome -
Interest Savings: $693k
Net Benefit After Hedge Cost: $646k
Result: The rate cap maintained DSCR compliance and enabled an early refinance on more favorable terms.
Who We Are
What We Do
Our Expertise
Ready to bring institutional-grade debt strategy to your portfolio?
Debt Scorecard
Monthly snapshots to help owners manage risk, maximize returns, and stay ahead of rising costs and tight liquidity.
Get a Defeasance Estimate
Use our Defeasance & Yield Maintenance Calculators to get an accurate estimate in just a few minutes.
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