4C — September 25 - October 15, 2020 — Fall Preview — M id A tlantic Real Estate Journal
C ommercial M ortgage B anking
By Brenner Green, Real Property Capital, Inc. How much aggravation are you willing to put up with to get a great deal?
ast time I was in San Franc i sco , short ly before the darkness
how made it funnier. But it’s also analogous to getting a loan in the current market.
which requires some ba - sic energy saving upgrades that are very easy to imple -
My response was “how much aggravation are you willing to deal with to get a
what we are willing to do to make a buck or save a buck. My grandfather used to drive to three different stores to save a couple bucks on din- ner ingredients (he never thought about the fact that his Cadillac got 11 miles a gallon and was drinking most of his cost savings with all the extra running around) and at dinner he would announce that it only cost $3 per person to create the meal. That’s more aggravation that I am willing to put up with and hopefully more time than I will ever have to myself, but to him it was worth it. We are closing some really great loans right now with super aggressive terms, but there is a lot of extra paper - work required because of COVID. Examples include a non-recourse full cash-out refinance of an office complex in the Lehigh Valley with a 10-year fixed rate in the mid 3’s, and a 75% non-recourse cash out loan on a mixed- use property in center city Philadelphia with the first three years interest-only, also in the mid 3’s. The extra paperwork and questions are not insignificant. The office building lender required five tenant interviews by phone. In 20 years in the business I can’t recall ever seeing this level of lender due diligence. There are also extra COVID forms that require our clients to describe how COVID is affecting every property in their portfolio, for example. Due diligence in general is very tight these days with all types of lenders, and bank lenders are generally moving very slowly. But markets are functioning more efficiently than most people probably realize and the end results are undeniably some of the most attractive terms that have ever been available. So how many hoops are you willing to jump through to get a 3% rate? How about 2.5%? Or all of your cash out with no personal guarantee? If you are like most people, the answer is “quite a few.” R. Brenner Green is a 20- year veteran in commer- cial real estate finance and President of Real Property Capital, Inc., a full-service commercial mortgage bank- ing firm based in the Phila - delphia suburbs. MAREJ
of the lock - down set in, I saw a guy wear ing a T shirt that r e a d “ I ’ m not gay, but $20 is $20.” Even in the super sensi-
Due diligence in general is very tight these days with all types of lenders, and bank lenders are generally moving very slowly. But markets are functioning more efficiently than most people probably realize and the end results are undeniably some of the most attractive terms that have ever been available.
Yesterday I told a client that he could get a 10-year interest- only loan at a rate below 2.5% if he were to go through the Fannie Mae “Green Program,”
ment such as low-flow shower heads and LED lights. His response was “It sounds like a lot of aggravation to deal with the government.”
sub 2.5% interest-only deal, for ten years?” He thought about it for a second and said “Well I guess quite a bit.” We all have our own tolerance for
tive world we live in, laugh - ing at it did not give me a guilty conscious that it would offend anyone, which some -
Recently Closed Loans
Multifamily Construction Financing
Single-Tenant Charter School Financing
Office Permanent Refinance
Philadelphia, PA 4.25%, 5/25, 75% LTV
2.66%, 24-Months Interest-Only, 75% LTV
Fixed at 2.71%, 10 year fully amortizing, 65% LTV
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 19428 • 610 -456- 9644 • firstname.lastname@example.org
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