Why We’re Not Waiting for Rates to Come Back Down
By Garrett Williams, MSF · Founder & Managing Partner, PTP Partners — July 22, 2026
Today, there’s a lot of turmoil in the marketplace. The war in Iran, rising oil prices, and the rising gas prices that followed have all added to a sense of instability. On top of that, the cost of borrowing is higher than it’s been in decades.
You’d think that the cost of borrowing would push real estate prices down to match, multifamily, single-family, all of it. But you’d be wrong. Today, you would genuinely be wrong. The properties that are trading right now almost always have one thing in common: a loan coming due soon, where the owner has decided it’s better to take the loss than let the lender foreclose on the property.
The truth is that a lot of sellers simply aren’t willing to come down in price in line with what the market is actually signaling. With interest rates where they are, the cap rate on anything you’re buying needs to be higher just to avoid negative leverage. But because rates haven’t been this high in decades, a lot of people are convinced they’ll come back down, or that this is just a temporary spike.
I’d argue otherwise. I think this is the new normal, and investors need to get used to it over time. Rates probably aren’t coming down anytime soon, and that’s okay.
Another type of deal we’re seeing get done involves an assumable loan at a rate lower than what’s available today. These can be attractive, but only if they actually fit your business plan. The last one that crossed our desk only had three years left on the loan. Since that didn’t line up with what we were trying to accomplish, we passed, not because it was a bad deal, but because three years was too short a timeframe for what we needed.
So how are we navigating this market, despite everything that’s happened? We’re embracing it. Taking it for what it is right now and working with it, rather than hoping the market shifts back to how it used to be. One thing I know to be true is that this will happen again. There will be times when the market does the heavy lifting for us and rent growth carries a deal, and there will be times, like now, when it doesn’t. As professionals, our job is to perform either way.
We are evaluating deals and underwriting them with the premise that rates will stay where they are or even rise. With this premise in mind, most assets today are mispriced. But that’s okay. It’s fine if sellers and buyers aren’t seeing eye to eye at this time, because eventually, pricing will catch up to where the market actually is.
As disciplined buyers, we can’t chase every opportunity that comes across our desk. Knowing what to say no to is exactly what allows us to recognize the real opportunity when it does show up. As operators, our first job is to protect capital, growing it comes second. Anything that looks risky or needs too short a window to work is a pass for us.
My background as an athlete comes from football, but there’s a baseball analogy for investing that I’ve always liked. When you’re up at bat, waiting for the perfect pitch can strike you out. But in investing, waiting for the perfect pitch is the whole point. You don’t have to swing unless it’s the one you’re actually looking for.
Thanks for reading Edition 7 of The Basis. If this added value, forward it to someone who should be reading it.
— Garrett
The Basis is a biweekly newsletter covering multifamily market data, underwriting frameworks, and investment strategy.