www.marejournal.com
12C —April 28 - May 11, 2017 — Spring Preview — M id A tlantic
Real Estate Journal
M ortgage
By Brenner Green, Real Property Capital, Inc. The Current Commercial Mortgage Market
C
hoppy waters con- tinue in the capital markets. As I feel
years by design, one cannot help but get the impression that the regulators are still reading the instruction book to find out what it says. The latest regulatory missive involves banks being told not to have more than 300% of capital invested in com- mercial mortgages. This is the main reason that, if you haven’t heard, that unless your last name is Kushner or Ross it is pretty much im- possible to get a construction loan in New York City right now. Many banks are across this 300% threshold and are
out of the game for lending on “riskier” assets like construc- tion loans. The other main reason for the shifting market is con- tinued volatility. Volatility in rates, and credit spread volatility caused by geopo- litical events. Much like the regulatory era, this condition has also been continuing a period of years. The result has been that there have been swings in pricing. Bank swap rates and CMBS rates have seesawed back and forth whereby one has been as much as forty basis points
inside the other over just the last four months or so. Fannie Mae DUS loan rates have ranged between wholly uncompetitive to banks to being the only game in town for a 10-year fixed rate deal at certain points. What all of this red tape and volatility equate to is inconsistency in that the outcomes are inconsistent for borrowers. Two levels of appraisal scrutiny (thanks to the review appraisal pro- cess as part of bank regula- tion), sudden rate changes, increased involvement of the credit department in all aspects of decision making and even pricing create an environment where there are more pitfalls along the way than ever before and more variability of outcomes. Meanwhile, lenders come and go in the market. A pro- gram that’s here one day may be gone the next. Where we are headed is impossible to say, but I am not expecting things to change in the short term. Be careful out there. R. BrennerGreen is a 19- year veteran in commer- cial real estate finance and president of Real Property Capital, Inc., a full service commercial mortgage banking firm based in the Philadelphia suburbs. n continued from page 2C Property Due Diligence . . . architects, mechanical and HVAC systemneeds, electrical system conditions, structural assessments for existing and new uses, and necessary archi- tectural and building envelop improvements. Although “due-diligence” is significant in upfront effort, it is the right approach to be un- dertaken for any development or redevelopment project. Information is power, and the more we know about all as- pects of the project, the better position we and our clients will be in to overcome obstacles and progress towards project success. RichardW. Humann, P.E. is president / CEO at H2M Architects + Engineers, a multi-disciplined A/E/B design - consulting firm servicing the Northeastern United States. n
and a lender that was uncom- petitive a month ago could be the hot lender today. It would be a fair question to ask why this situation has been the case for what is now an extended period of time. The answer is a little bit com- plicated but it largely has to do with the ever-increasing restrictions of the “new” banking regulation that we all continue to peel back lay- er by layer nearly a decade later. While the regulation, being as expansive as it is, was implemented a little bit at a time over a period
like I have been writ- ing about in one form or another for what is over a year now, t he mo r t - gage mar- ket , whi le
Brenner Green
generally pretty strong in terms of the ability for one to obtain a loan, is on shifting sand. The best option one day may not be there tomorrow,
Recently Closed Loans
$4,000,000 $5,362,500 $8,250,000 Multifamily Permanent Loan Office Acquisition/Bridge Loan Multifamily Permanent Loan Philadelphia, PA Fort Washington, PA Hamilton Township, NJ 75% LTV, 5/30, 4.11%, Non-Recourse 75% LTV, 24 Months, WSJP + 1.00% 75% LTV, 7/30, 4.0%, Non-Recourse
Real Property Capital is a Philadelphia based full service commercial mortgage banking firm with a regional focus and national capabilities. Our business model emphasizes client satisfaction through a high-touch, analytical approach that distinguishes us from the competition. Learn more about our distinct approach and proven track record of success at www.realpropertycapital.com . FOR MORE INFORMATION: R. Brenner Green, President 303 Harry Street • Conshohocken, PA 19072 • 610-456-9644 • bgreen@realpropertycapital.com
Made with FlippingBook Online newsletter