8A — August 14 - 27, 2020 — Financial Digest — Investment/Multifamily Financing — M id A tlantic Real Estate Journal
www.marej.com
I nvestment /M ultifamily F inancing
By Mark Scott, Commercial Mortgage Capital The market is no longer February’s market…
will the November election bring us? A new administra - tion has promised to pull the plug on the 1031 and the overall real estate market. Many moving parts to the new COVID economy. Front line loan officers still have the desire to make loans. Banks are flush with cash, CMBS lenders have found a new market floor to dance on, and life companies seek to cherry pick the deals. The number of cherry deals are shrinking as rent collections in most asset classes, have been adversely impacted by
the pandemic. True—Headline interest rates are down. Treasuries are down, spreads are a bit wider. Beware though, of the effective cost of loans in many loan products is a bit more than the headline numbers. Multifamily agency lenders are now requiring significant debt service reserves (some as much as a year) which serves to suppress usable proceeds and increases the effective cost of loans. CMBS lend- ers are toying with and now requiring a “COVID Interest Reserve”. This new reserve is
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As a result of these changes, the velocity of transactions in all sectors has slowed as buyers, sellers, borrowers and lenders adjust to a new reality, a new world of risks and a new period of price discovery. In the world of mortgage fi - nance, daily, I ammade aware by lenders of credit officers tightening lending standards as the future is still quite unclear. Fear of the future abounds. Will there be a cure or vaccine to shift market direction? Will government support of the consumer and businesses continue? What
to be held based on the status of the local and state COVID orders at the location of the property. Escrow funds may not be released until Stage IV levels (for example as in NY State; now on July 24) are achieved. Buyer beware in the new COVID market. For mortgage bankers (such as yours truly) times are good. Many borrower relationship lenders have been disrupted or adversely impacted. Thus the increased assistance of an experienced mortgage banker can assist in sourcing capital. Although transactional sales activity is down, owners should be reviewing their portfolios seeking any and all oppor - tunity to employ a mortgage banker and work to lower their borrowing costs and overall cost of capital. Mark Scott is president of Commercial Mortgage Capi - tal, a correspondent Mortgage Banking firm based in Livings - ton NJ. Mark brings 35 years of commercial and mortgage banking expertise to each proj - ect he works on. Mark Scott is founder and principal of Commercial Mortgage Capital in Liv- ingston, NJ. MAREJ CMC secures $19M in financing for 504 multi-family units LIVINGSTON, NJ — Liv- ingston based, Commercial Mortgage Capital , recently announced it secured $19 million in financing for 504 garden apartment units. The loan was arranged by Mark Scott , president of Com- mercial Mortgage Capital, through Spencer Savings Bank . “CMC is pleased to secure this financing on behalf of our client. Given the current situation with the COVID-19 pandemic, we were thrilled to be able to find the capital and close this loan at a low fixed rate,” said Mark Scott in a prepared statement. The two loans closed are secured by 208 units at Bell- mawr Manor located in Bell- mawr, NJ and 296 units at Stonebridge Run located in Bristol, PA. CMC’s loan volume has been exceptionally strong during the COVID-19 crisis while borrowers seek opportunistic capital from the limited lend- ers available. MAREJ
very commercial proper- ty owner, developer, bro- ker and borrower I know
has been af- fected by CO- VID. Prices have adjust- ed, financing terms have changed and t h e w o r l d is in a new place. No lon- ger are we in
Mark Scott
the high flying 3.5%, 4.5% cap rate world or in an Interest Only MAX proceeds financing environment of February 2020.
R I T T E N H O U S E C A P I T A L A D V I S O R S E x p a n d i n g C l i e n t B a s e & R o s t e r o f L e n d i n g O p t i o n s T h r o u g h C O V I D - 1 9
P r o p e r t y T y p e s I n c l u d e : M u l t i - F a m i l y , S e n i o r L i v i n g , M i x e d - U s e , R e t a i l , O f f i c e , M e d i c a l O f f i c e , H o s p i t a l i t y , S i n g l e T e n a n t N e t L e a s e
George Johnson President & CEO
Joe Hanascin VP, Lending Operations
William Patton Transaction Manager
Ken Wellar Partner
Corey Lonberger Partner
107 S. 2nd Street, 4th Floor Philadelphia, PA 19106 ph. 215.454.2852 info@rittenhousecapital.com
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