- Repayment Options
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When defeasance became standard call protection for average commercial mortgage backed securities loans in 1998, the timing could not have been worse for borrowers. Yields on government securities declined steadily in 2001 and 2002 making defeasance increasingly more expensive as
- Separation Anxiety
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In February the White House published a report to Congress mandated by the Dodd Frank Financial Reform Bill. The white paper indicated a significantly reduced role for the government sponsored entities Fannie Mae and Freddie Mac, winding down their conventional
- Struggling Properties Can Exercise Workout Options to Improve Financial Health
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This year is shaping up to be the most active period for real estate workouts since the early 1990s, primarily due to the declining value and performance of commercial properties during the economic slowdown. Tightening capital markets have compounded the
- Sale-Leasebacks Provide Capital for Core Business Investment
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The market for sale leasebacks — transactions in which companies sell and then lease back real estate assets — is growing at an estimated $10 billion to $15 billion annually. Continued increases are expected due to today's difficult real estate
- Wait and See
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Last year, the commercial real estate debt market again decreased considerably from the last decade's double digit growth rates. This slower growth indicates a lower level of transactional activity —buying, selling, and refinancing — taking place as the industry awaits
- What's Your Exit Strategy?
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There are many factors to consider when entering into a fixed rate commercial real estate loan what’s often forgotten is how to get out. Negotiating a solid exit strategy should be a critical aspect of all fixed rate loan originations.
- Mind the GAAP
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GAAP is widely used. It is required for public companies such as publicly traded real estate investment trusts, and often it is demanded of private real estate companies by institutional investor partners. But GAAP is not the only choice for
- Multifamily Property Owners Benefit From Competitive Financing
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The current low interest rates present a double edged sword for many property owners The rates offer increased cash flow opportunities, but they also allow tenants to qualify for higher loan amounts and motivate them to move out of apartments
- New Funding for Affordable Housing Encourages Public/Private Partnerships
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Affordable housing is a critical socioeconomic issue in many regions, and demand is rising nationwide. Yet financing and developing affordable housing can be challenging. Many affordable housing projects involve more planning and entail greater risks than similar market rate projects
- Redefining Debt
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Downsized operations and scarcity of tenants have temporarily left many business owners and developers with too much real estate and too much debt. Refinancing often is the solution of choice, but doing so isn&rsquo t always viable. Owners or developers
- Pre-Underwriting Helps to Sell Properties
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Residential homebuyers often get pre qualified to facilitate their negotiating and purchasing process. Commercial property brokers can use a less common but similar process for their income property listings — although it's the property that gets pre qualified, or pre
- Private Mortgage Loans Provide a Short-Term Financing Alternative
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Private mortgage loans are made by private lenders instead of traditional financing sources such as banks, lending institutions, or government agencies. They usually are short term (6 months to 3 years) hard money or asset based loans, and the decision
- Rising Rates
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Recent commercial real estate capital market demand has caused capitalization rates to decline significantly, which has inflated real estate values despite poor fundamentals. Yet most experts believe that cap rates soon will climb. Investors should assess their properties to ensure
- Loan Language
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Commercial real estate finance remains in a state of flux. Lenders are re entering the market with new policies and underwriting criteria. Many lenders have toughened the terms of their form loan documents. It is important for borrowers to understand
- Understand Lender Criteria to Finance Manufactured-Housing Communities
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Manufactured housing is a niche that offers potentially strong returns for some investors. Once thought of as simply mobile home parks, today's manufactured home communities are split into two primary categories landlease communities where residents own their homes and lease
- Understanding Today's Underwriting Criteria Makes Refinancing Easier
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With historically low interest rates still available, many property owners are seeking to refinance their loans. However, they should be aware that today's lenders underwrite real estate values far differently than in the past by using a relatively new set
- Affordable Money
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With the ever increasing need for more affordable housing, both nonprofit and for profit developers must consider every available below market rate financing program to make such projects economically feasible. Viable sources may be 501(c)(3) bonds for nonprofit developers
- A Taxing Situation
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As markets conditions continue to squeeze both landlords and their tenants, renegotiating loan terms can be an effective strategy for property owners to reduce overhead. But beware — the financial implications aren’t as simple as they sound. Many property owners
- Construction Plans
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Sponsors and owners considering financing the construction of commercial real estate projects need to know how lenders evaluate a project's overall risk. Such understanding increases the likelihood that a developer's application for financing will be approved. Lenders view construction loans
- Consider the Options
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When fully understood, properly prepared, and used correctly, real estate options are an excellent way for knowledgeable investors to conserve capital, create leverage, and reduce risks. Investors and clients who may be short on capital may find options a good
- Bridging the Gap
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The credit crisis has had a significant impact on commercial real estate and the availability of financing. Most lenders have reduced maximum loan to value thresholds to 65 percent and increased debt service coverage ratio minimums. Life insurance lenders are
- Before the Build-Out
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In today’s competitive leasing market, build outs or other capital improvements are good ways for property owners to retain current tenants or attract new ones. Creating more open floor plans or providing additional capacity for new technologies can adapt older
- Cool Down Costs
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While occupancy, maintenance, and zoning matters consume a great deal of property owners and managers’ time, these professionals also must consider other important business components, such as energy costs, to remain competitive. When left unmonitored, energy costs can become a
- Agency Programs Provide Financing for Seniors Housing
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Less available capital is the result of overbuilding and profitability woes in today's seniors housing market. However, several viable options remain, including government backed financing. Lenders Change As recently as two years ago, seniors housing developers, owners, and potential buyers
- Back to Basics
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How can commercial real estate borrowers obtain financing and survive the capital markets mess? Is there a secret handshake to get a loan application or a password for a term sheet? In reality, the answer is far simpler Bring in