1315_Nareit Testimonials_Duckworth_2023-04-10_v2
04/17/2023 | by Nareit Staff

Gavin Duckworth, managing director, hedging and capital markets at Chatham Financial, participated in a video interview in conjunction with Nareit’s REITwise: 2023 Law, Accounting & Finance Conference held March 21-23 in Phoenix, Arizona.

Duckworth commented on ways in which REITs are minimizing their exposure to interest rate risk. He noted that over the past 12-18 months, REIT clients have taken advantage of hedging tools, including Treasury locks and forward swaps, to help mitigate that risk.

Meanwhile, the inverted yield curve is also prompting clients to lock in rates, Duckworth said. “Swap rates are fairly attractive to lock rates out three or four years, based on where we are today.”

Overall, the various hedging tools have “played out very well,” Duckworth said.

Duckworth also discussed what REIT clients are doing for LIBOR debt or hedges that have not yet transitioned to SOFR. He noted that today, the basis adjustment is not as favorable and execution charges have gone up significantly. As a result, many of Chatham’s REIT clients are slowing down their transition process, he said.