Category Archives: Lending

Retail and Restaurant Tenant Credit Ratings

This one is for my triple net retail investors. Net leased retail buyers desiring leverage know that national credit retailers’ credit ratings with S&P and Moody’s are hugely important for getting a loan at decent rates and terms or even getting the loan at all. Investment grade credit is S&P BBB or above. Once in…

Pricing Bubble Returns Again to Commercial Real Estate

In DLA Piper’s annual survey of the commercial real estate industry, 85 percent of senior executives at commercial real estate brokerages, REITs, etc., hold a bullish outlook for the remainder of 2013.  56 percent see a combination of low interest rates and a abundant debt and equity capital as a primary reason for their optimism. …

More Lenders and More Money for Construction

Developers report that although money is still tight for new commercial development, money is far more available that it was a year ago, especially for new multiunit development. “It’s a good time to be a multifamily developer,” says David Cardwell, vice president of Capital Markets for the National Multi-Housing Council. “I don’t know of any…

Commercial Transactions – SNDA and Estoppel Agreements

I’m going to do a real quick, hopefully brief ‘Cliff Notes’ summary of these two important documents.  This of course applies to not only retail, but any commercial transaction where there is a tenant and a lender involved. Anyone who has survived the commercial loan process knows about these two documents.  Tenant estoppels and SNDA…

Commercial Real Estate Capital Markets From a Regional Bank’s Perspective

Commercial Lender Regional Bank

I attended a seminar last week sponsored by the Columbus Board of Realtors with one of our largest regional banks, and I want to disseminate some of what I heard.  Banks once again have production goals, so that could benefit you , the investor or owner user, IF you fit their profile.  Huntington Bank as…

Commercial Real Estate lending heating up.

True, many banks are still working through their distressed property pipeline, but many have recently decided that it’s time to jump back into commercial lending, and yes,  even for development and construction financing.  It must be noted though that this is one area that brought down more banks during the downturn than any other.  The…

Commercial Real Estate Lending Update

It’s a mix of both moderately good news and some bad news.   Starting with the bad news is that we had a major drop off in construction and development funding from $321 billion last to $240 billion this year. I was pretty optimistic back during the second and third week of January when I was…

Mortgage Bankers Association – Continued Growth in 2012

Commercial real estate lenders are expecting to build on a very good 2011 with a stronger 2012.  Barring international shocks such as a war with Iran or disruption in oil supplies, 2012 should see a loan volume in the range of $230 billion, up 17% from 2011, and continue to rise to $290 billion by…

Banks Move Carefully Back Into Commercial Real Estate Lending

For the first time in five years, a majority of banks are considering growing their loan portfolio due to improving conditions in just about all sectors of the economy. There’s neither an overwhelming consensus nor a large gain in activity, but most banks feel that they are through the worst of the write downs and…

CMBS Issues Hammered Retail Closings in Third Quarter

Retail closings fell 46% in the third quarter to $8.2 billion from the second quarter’s $15.2 billion.  As bad as that was it was still an improvement over last year’s third quarter of $6.6 billion.   True, second quarter might be distorted a bit by Blackstone’s $9.2 billion acquisition of Centro Property Group’s portfolio, but activity…

CMBS Market Slows Due to Nervous Investors

The CMBS recovery was coming along so strongly in the first two quarters of 2011 that conservative estimates were $35 – $40 billion and some predictions as high as $50 – 55 billion in originations for the year versus $10 billion for all of 2010.  Then we had the stock market, job growth and debt…

SBA 504 Refinance Program a Failure

I’ve written several times in the past year about the September 2010 newly launched SBA 514 program, and like so many government programs as of late, has been a failure.  How could this happen so quickly?  It has gone in one year’s time from considerable fanfare in September 2010 to dormant today.  Only about $50,000,000…

Mortgage Purchase Applications at 15 Year Low

US Mortgage Purchase Applications Fell to a 15 Year Low and economic uncertainty resurfaces. “Another week of volatile markets and rampant uncertainty regarding the economy kept prospective home buyers on the sidelines, with purchase applications falling to a 15-year low,” Mike Fratantoni, MBA’s vice president of research and economics, said in a statement.  CNBC –…

Real Estate Capital Surges in the Second Quarter

A reported $35.48 billion was raised in the second quarter for acquisitions and refinancings.  The total for the first half was $66.43 billion.  It took nine months last year to raise the same.  Of what was raised, $5.42 was to be used to repay debt, while $30.5 billion was targeted for acquisitions and investments.  $5.49…

Commercial Real Estate – The Burden Eases

The CRE burden eases to the nation’s 7584 insured banks and thrifts.  The total of distressed commercial real estate assets are $171 billion and that’s only 1.3% of all bank assets. As distress eases, banks set aside fewer dollars to deal with losses, and funds available for lending will increase.  This is the sixth consecutive quarter…

Commercial Real Estate Lending – Robust Again

The recovering capital markets are helped by the improving economy and consistent job growth.  Manufacturing is expanding and corporate profits are up strongly so the spigot is on again.  Life companies are quite active again; new CMBS offerings and syndicators are assembling new CDO offerings.  Even commercial banks are reporting loosening of commercial lending standards…

SBA 504 Refinance Program – Commercial Real Estate Loans

Although, I’ve written about this in February, I thought it might be a good time for reminder, that as of April 6th the SBA Small Business Administration will open its 504 refinancing option to businesses with commercial real estate balloon payments due after that date. “With the collapse of the real estate bubble, many small business…

Commercial Debt Levels Still Falling

Outstanding commercial debt fell by $12.1 billion in fourth quarter 2010.  It was the fifth consecutive quarterly drop since the recession began, although the decline was less severe than past quarters as lenders get back into the game. blogs.wsj.com – Developments – Commercial Real Estate Debt Levels Fall Again

CMBS Market Back in 2011

CMBS activity is way up with $6.5 billion in new securitization coming to market in the last few weeks.  The activity to date in February is 2/3rds of the total CMBS deals offered for all of 2010.  Additionally, Freddie Mac brought two multifamily offerings totaling $1.86 billion to market.  This is reminiscent of 2006 and…

SBA – 504 Loans for Refinancing Commercial Real Estate Approved

The United States SBA for the first time is allowing for the temporary extension of the 504 loan program to allow refinancing of existing commercial real estate debt. The SBA will start accepting loan applications Feb. 28. The program will end Sept. 27, 2012. Much more detail at the link. SBA 504 Loans Approved for…