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The Lending Landscape: During the first quarter of 2010, four financing sources effectively took control of the lending market. Government sponsored enterprises, insurance companies, real estate investment trusts, and private situational lenders have money to lend and will finance projects that the national,
The Loan Request Package: Today’s lending environment is unlike any I have seen in my 20 years as a mortgage banker. Unfortunately, capital may remain scarce for several more years. In such a competitive marketplace, borrowers may only get one chance with a lender.
Demystifying Defeasance: The credit markets are frozen and conduit lenders are not lending, but defeasance transactions are still closing. At the end of 2007, more than 36 percent of all outstanding commercial and multifamily loans were securitized — $913 billion of the
Equity Injection: The dominos continue to fall in the commercial real estate market, leaving lenders exceptionally conservative in making loans for new projects. Loan to value ratios in the 50 percent range are not uncommon. In fact, some would say that outright
Cost Comparison: A Case Study: When looking to extinguish fixed rate debt, borrowers have two alternatives yield maintenance or defeasance. Both methods allow the borrower to unencumber the underlying real estate asset, and both compensate for the lender’s reinvestment risk following prepayment. However, each method
Carveout Consequences: In the commercial real estate market&rsquo s current distressed state, mortgage lenders are faced with falling real estate values and sluggish properties that can&rsquo t meet debt service obligations. Inevitably, loan documents become the roadmap for lenders seeking to recoup
Capital Markets Conundrum: With daily reminders of gloom and doom regarding the economy&rsquo s current state, bank closures, and frozen credit, it is not a stretch to imagine that one day industry professionals will tell their young prot&eacute g&eacute s about the struggle
Climbing the Capital Hill: Capital availability has improved since the dark beginning of the recession. This year the real estate capital markets came off life support, although they still remain in intensive care. Well capitalized firms and owners are taking advantage of inexpensive money.
Choosing a Defeasance Consultant: With commercial real estate credit markets slowly beginning to thaw, borrowers are beginning to explore the costs and requirements associated with exiting existing real estate debt. If the loan has been sold into a commercial mortgage backed securitization, borrowers will
Financing Affordable Housing: When considering ways to use vacant land and existing buildings, commercial real estate investors and brokers often overlook a viable alternative — government sponsored affordable housing. Real estate investors should be aware of the myriad opportunities to purchase underdeveloped land
Exit Strategies: When looking to refinance or sell a real estate asset encumbered by fixed rate commercial mortgage backed securities debt, borrowers typically are faced with two alternatives yield maintenance or defeasance. The intent of both alternatives is to allow CMBS bondholders
A Public Financing Solution: When representatives of regional developer Lane4, the Kansas City Wizards Major League soccer franchise, and medical information technology company Cerner Corp. walked into my office a year ago, they had a massive project in mind A 4,000 employee office campus,
Midpoint vs. End-Point Discounting: Sophisticated spreadsheets and popular financial analysis software programs often use a midpoint discounting technique to compute internal rate of return and net present value. Investors, brokers, and financial analysts comparing alternative investments need to understand this discounting technique to better
Multifamily Federal Financing Guide: The commercial mortgage backed securities market, which in recent years represented up to 66 percent of all commercial loans, has ceased to exist. This means the universe of commercial real estate debt currently outstanding now must be squeezed into a
Redefining Debt: 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
Mixed Signals: Commercial real estate financing is still relatively cheap and fairly accessible, but there is room for volatility. With a Trump administration, the Brexit vote, and an increasing 10-year Treasury Note rate, a lot can change in the commercial real estate lending in the coming months.
Capital Markets 2012: Many economic issues converged late last year to slow commercial real estate's recovery. In addition, the uncertainty of vintage commercial mortgage backed securities loans coming due this year and for the next several years has buyers, sellers, and investors speculating
Improving Loan Packages: A lot of detail goes into an ideal loan package, but securing favorable terms can pay off for decades.
11 Ways to Finance Commercial Real Estate Energy Retrofits: According to the U.S. Department of Energy, commercial buildings account for 35 percent of U.S. (and 40 percent of global) electricity consumption. Most commercial real estate professionals accept that energy efficient buildings can, and do, impact the value of the
Breaking Down Defeasance: CMBS borrowers should understand the prepayment process. During the last cycle, commercial mortgage backed securities lending gained in popularity, culminating in a frantic pace of origination between 2005 and 2008. During that period, many borrowers went through loan defeasance. But for a fairly long stretc
Financing Niche: Commercial real estate has come a long way in three years. In 2011, financing was scarce and transactions were difficult to close. Now, lenders are ready to step off the sidelines. But, to their surprise, the field is quite crowded.
Success Stories: During the past six months, commercial real estate capital has re entered the market after almost a two year absence. Capital providers are eager to deploy their funds. They are increasingly inclined to consider speculative leasing, secondary markets, sub institutional
A Wealth of Financing: Money, the driver behind the wheel of many commercial real estate transactions, is readily available in most property markets and geographical locations. Now that the market has recovered fully, commercial banks, Wall Street firms, conduits, pension funds, and life insurance
Finding Financing in Today's Market: As the national overview indicates, multifamily is still an active property sector however, financing for transactions remains difficult. In this regional roundup, CCIMs nationwide share strategies for securing multifamily financing in their markets. New York "It's important to be aligned
Financing Green Initiatives: Randy Eckers, chair of the real estate finance practice for Akerman LLC, talks about the Commercial Property Assessed Clean Energy (C-PACE) program, which allows building owners to borrow money to complete projects with repayment made through an assessment on their property tax bill.