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Back to Basics 

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

Be Resourceful 

While some commercial real estate investors secure financing through deals with their existing banks, most investors, developers, and owners derive the best terms when lenders compete for their business. Creating a competitive situation is the role of a commercial financing

Agency Programs Provide Financing for Seniors Housing 

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

Before the Build-Out 

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

Borrower Beware(1) 

Most commercial mortgage lenders charge application, due diligence, and loan commitment fees, but do your clients know what that money really is buying? Often, it is less than they think. The loan application process is becoming increasingly arduous as lenders

Bridging the Gap 

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

Loan to Own 

Given the current credit market constraints, seller financing may be a way to bridge the financing gap facing buyers and sellers in today&rsquo s commercial real estate market. Seller financing is a transaction in which the seller makes a secured

Lenders Tighten Loan Standards in Reaction to Uncertain Economy 

With interest rates at record lows, demand for new mortgage loans remains strong. However, in today's anemic economic climate, lenders face increased risk of making non performing loans. Although it is impossible to eliminate this risk entirely, commercial real estate

Making It Work 

Investors soon may feel the effects of a cooling real estate market through subtle and not so subtle shifts in the way lenders view commercial real estate loans. The industry experienced strong surface growth last year National overall vacancy rates

Lenders Talk TICs 

Tenancy in common transactions involve a number of unique features. While currently there are no clear cut guidelines on how TIC deals must be structured, lenders that finance such projects are careful to impose certain requirements that usually are not

Low Rates Help Insulate Commercial Markets from Unstable Economy 

Last year, the commercial real estate debt market slowed considerably from the double digit growth the industry experienced the past three years. Overall, at the end of second quarter 2002, the debt market had grown 3.7 percent from the end

Multifamily Property Owners Benefit From Competitive Financing 

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

Mind the GAAP 

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

Entrepreneurial Mezzanine Financing Sources Offer Flexible Equity 

In recent years, mezzanine debt and equity financing has been growing steadily into a major source of funding for all types of commercial real estate projects. On a marketwide basis, the real estate mezzanine financing sector represents 10 percent of

Institutional Lenders Offer Viable Financing Alternatives 

Institutional lenders such as life insurance companies and Wall Street conduit lenders offer various financing options for commercial real estate ventures. In tight economic circumstances, commercial real estate professionals carefully should study the available options to make wise decisions for

Loan Language 

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

Sale-Leasebacks Provide Capital for Core Business Investment 

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

Rising Rates 

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

Separation Anxiety 

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

Repayment Options 

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

Federal Historic Tax Credit Aids Adaptive Reuse Developers 

For adaptive reuse projects involving historic buildings, developers often tap into a federal tax incentive program known as the historic rehabilitation tax credit. This program generates a credit that directly reduces taxes rather than offering a tax deduction such as

Financing Still Available for Well- Structured Technology Ventures 

Less than a year ago, landlords and lenders were trading warrants for security deposits and leasing space at exorbitant rents to technology tenants. Currently, with the Nasdaq below 2000 and capital spending for technology at a halt, corporate credit has

Exporting Capital 

As economies throughout the world continue to expand, the flood of real estate investment capital headed overseas has swelled to record levels. This unprecedented growth is expected to continue throughout the year and well into 2006. Despite a weak dollar,

Cost-Segregation Solutions 

Cost segregation is an accepted Internal Revenue Service method of allocating the purchase price paid for real estate property. Generally, cost segregation enables owners to increase the depreciation deductions from their properties, providing substantial present value benefits by reducing income

Cost-Segregation Advantage 

On Feb. 13, President Bush signed the Economic Stimulus Act of 2008 into law. The legislation is intended to encourage spending by providing advance refund rebates to individual taxpayers along with business tax breaks in the form of accelerated depreciation