2A — June 26 - July 16, 2020 — M id A tlantic Real Estate Journal
www.marej.com
M id A tlantic Real Estate Journal
M id A tlantic R eal E state J ournal Publisher, Conference Producer . .............Linda Christman AVP, Conference Producer ...........................Lea Christman Publisher ........................................................Joe Christman Editor/Graphic Artist..... .................................Karen Vachon Contributing Columnist .....Paul Fetscher CCIM CRX CLS, American Brokerage Inc. Mid Atlantic R eal E state J ournal ~ Published Semi-Monthly Periodicals postage paid at Hingham, Massachusetts and additional mailing offices Postmaster send address change to: Mid Atlantic Real Estate Journal 350 Lincoln St, Suite 1105, Hingham, MA 02043 USPS #22-358 | Vol. 32, Issue 12 Subscription rates: 1 year $99.00, 2 years $148.50, 3 years $247.50 & $4.00 single issue - plus postage REPORT AN ERROR IMMEDIATELY MARE Journal will not be responsible for more than one incorrect insertion Phone: 781-740-2900 | Fax: 781-740-2929 www.marej.com
UPDATED
2020 CONFERENCE SCHEDULE
Paul G. W. Fetscher, CCIM CRX CLS
Creative Financing: The Key to SecuringDeals I n a well balanced market, traditional financing is the usual and conventional method of providing capital for transactions. However, we seldom find ourselves in a well balanced market. Trends and perceptions usually bring us to either a sellers market, or a buyers market. Prior to the savings & loan collapse of the 1980’s, interest rates had climbed to unsustain - able levels. Prime rate hit a high of 12% while investment properties were commanding a 10% capitalization rate. In that era of inflation and expected appreciation, banks were ready to accept development fees as financeable and issued 100% - 120% loan to value financing. And then it all came tumbling down. Over 1,000 of 3,200 sav - ing & loan associations failed. Then came the meltdown of the 2008 financial crisis. With precipitously falling real estate values, lenders again found themselves with overfinanced properties. One executive vice
September
Sept. 2, 2020-6th Annual New Jersey Leadership
president of a financial group would only write 60% LTV loans. If the market continued to slide another 20% in values, he would still have an 80% loan. That brought about a challeng - ing situation for developers. They would have to put up 40% real live equity in order to move forward with a project. The age of Covid-19 has thrown un unprecedented monkey wrench into the world of financing. Now, more than ever, is a time for creative financing. Just about every commercial real estate landlord has found his cash flow to be interrupted. Manufacturing operations have been halted, office space
has been hit harder, and retail has been hit worst of all. Now, more than ever we are in need of creative financing. Today, try calling your land - lord or you bank and telling them you can’t pay this month. We have all experienced how long it takes to obtain bank approval on financing. The process starts with a myriad of forms. Then the requests for additional information, and, of course, the “committee” who, like the spectators in the Roman Coliseum, issue either a Thumbs Up or Thumbs Down. Their decisions can be arbitrary, capricious, and absolutely final. continued on page 14A
Sept. 9, 2020-5th Annual Philadelphia Healthcare & Medical
October
October 1, 2020-6th Annual New Jersey Industrial Real Estate Development
781.740.2900 marej.com/conf
Made with FlippingBook - professional solution for displaying marketing and sales documents online