Commercial mortgage costs climb as Fed rates fall

01/25/2008 | Bloomberg1

Borrowing costs for commercial properties rose as much as 1.25 percentage points in the U.S. despite the general environment of easier money. Commercial loan rates rose because of the higher risks that come with the falling prices for apartment buildings, offices, retail properties and hotels. Delinquencies of securitized commercial mortgages may quadruple in the next 18 months to almost 4%, said Kenneth Rosen, a University of California-Berkeley economist who runs a real estate hedge fund.

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