With all the talk of increased allocations by lenders at the conference, it seems like the credit crisis is fading into the abyss as lenders speak of anticipating extreme competition this year to get their money out.  This year the conference was held in San Diego and representatives from 25 CMBS platforms, 50 life insurance companies, agencies, FHA and various bridge, mezzanine lenders and hedge funds attended.  NorthMarq ran two suites and had meetings on the half hour with each lender.  We also hosted a cocktail party for 150 lender representatives.  The overwhelming message was “we have money, lots of…

By: James DuMars, Phoenix office managing director-NorthMarq Capital The gloves are off as several life companies lowered their rates below 5% in order to compete for loans against Class A apartment communities and institutional industrial.  We’ve seen rates as low as 4.45% fixed for 10 years for low leverage loan requests on multifamily.  Let me emphasize that these are for large loans against Class A multifamily in solid locations across the US.   However, the trend of narrowing spreads continues as life companies seek out opportunities to deploy capital on quality assets and multifamily is at the top of many companies’…

By: James Dumars We’ve not seen a recovery in the multi-family rental market but values have increased dramatically.  It’s easy to draw the positive correlation between lower interest rates and falling cap rates for multi-family.   Multifamily owners have a significant advantage over owners of all other types of commercial real estate as they can access government guaranteed debt from Freddie Mac and Fannie Mae.  As I understand it, the investors who buy this debt on the secondary market are rewarded with higher yields than standard US Treasuries but receive the government’s guaranty on the bonds.   Consequently, recent Freddie Mac securitizations…

By: James DuMars, managing director-NorthMarq Capital’s Phoenix office We’re seeing increased activity from several large banks and investment banks as they seek to accumulate loans for their CMBS programs as well as increase “on book” commercial real estate loans. Just this week, I met with one national bank and learned that they funded approximately $1 Billion in new permanent loans in the past 60 days within their Commercial Mortgage Origination group, bringing their total year-to-date production to $1.6 Billion. Their goal this year is $3 Billion, significantly more than the $700 Million they originated in 2009. Many of these loans…

This headline is being broadcast throughout the real estate industry and is stirring up optimism that more liquidity is returning to the marketplace. The new loans are more conservative and have some nuances reflecting the decrease in risk tolerance of both the originators and the purchasers of the paper. The originator doesn’t want to be stuck with the paper and the purchaser wants to make sure the value or rating of the paper stays intact. To identify the major differences in the new CMBS loans verses those offered during the credit boom, I’ve summarized a brief comparison below: Present/Former  Amortization:…