Real Estate Journal — Pennsylvania Experts — September 14 - 27, 2018 — 13C
www.marejournal.com
M id A tlantic
P ennsylvania E xperts By Gregg J. Wallace, AMA Financial, LLC Financial “State of the Union”
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institutions, hedge funds & opportunity funds have not let themselves to get back to the “covenant-lite” levels of 2007. The lending markets are still extremely vibrant and active, as there is an abundance of liquidity in both the debt and equity sectors. This liquidity has been flooding the market over the past 5 years, and has come from the U.S., as well as foreign markets. To recap, AMA believes that its’ unique relationships with clients and financial institu- tions, will allow us to be ex- tremely creative and successful in structuring first mortgage
debt, mezzanine finance, pre- ferred equity and equity needs in the future. AMA believes the mortgage banking business will become even more important, as the national relationships that mortgage bankers have will be able to fill a big void for the developer who usually stays within his market for financing. Ultimately, AMA is prepared for the next real estate cycle and ready to deliver its unparalleled personalized service. Gregg J. Wallace, Presi- dent of AMA Financial, LLC: gwallace@amafinancial. com; 610-784-0400 x11; 609- 472-9030
ince 2003, AMA Finan- cial has been serving its commercial real es-
Treasury notes. The gap between US two-year Treasury Bills and 10-year Treasury Notes is approxi- mately 0.34 percentage points today, and after this next rate hike, they will be nearly equal thus reflecting a flat or inverted yield curve. It was last at these levels in 2007 when the United States economy was heading into what was arguably the worst recession in almost 80 years. Every recession prior to 2007 was preceded by a flat or inverted yield curve. However, in today’s envi- ronment, AMA feels the yield curve inversion is a less reliable
indicator this time than it has been in the past, because there are pressures keeping long- term rates low. Either way, the flow of lending is likely to be curtailed, but not come to a complete halt. Even after the 2007 recession, AMA was still extremely busy and could assist its clients with all their capital needs. With that being said, many lenders and equity providers are starting to be more cautious in picking and choosing spe- cific transactions yet actively lending as they prepare for the changing rate environment. To their credit, most financial
tate clients’ and is one of the leading commercial m o r t g a g e - b r o k e r a g e firms. AMA specializes in providing a broad scope
Gregg J. Wallace
of creative structured finance and equity options for all commercial property types. (Multi-Family, Office, Indus- trial, Student Housing, Hotels, Retail, Senior Living and Self- Storage) Our mission is to meet the financial needs of our clients by providing innovative solu- tions combined with hands- on personalized commercial mortgage brokerage services. Over the past decade our firm has placed over $3B of debt & equity in an array of transac- tions. So far in 2018, AMA has completed over 15 transactions worth $300MM: ● Student Deals/Multi-Family $150MM • CMBS – Permanent Loan • Fannie Mae & Freddie Mac • Bridge/Repositioning Loans ● Condo Development - $7.5MM ● Office/Medical Office/Industrial • Bridge/Repositioning Loans ● Single Family Home Tract Development - $8MM ● Self-Storage - $16.5MM • Local Bank – Permanent Loan • Ground-Up Construction ● Hotels - $35MM • Bridge/Repositioning Loans ● Retail & Specialty Use $47MM • CMBS – Bridge Loan • Ground-Up Construction While 2018 and the years prior have been very busy, AMA recognizes the commercial real estate finance business is enter- ing another unique time. It is likely that in the 4th Quarter of 2018, the Federal Reserve will increase short term rates again. After this increase, it will become very difficult to ignore the present interest rate simi- larities and those prior to the 2007 recession. Specifically, the yield curve, which in the past has been the best predictor of a looming recession, is once again pointing in that direction. What is the “yield curve?” The yield curve is basically the difference between short-term interest rates and long-term government bonds, like 10-year $40MM • Equity
AMA Financial, LLC 2018 Deals Closed
Acquisition & CapEx 80% LTV - Fixed 4.69% - 10/30 5 Years IO
$29,500,000
Refinance - Rate & Term 75% LTV - Floater L+200 - 10/30 5 Years IO
$26,600,000
Acquisition & CapEx 80% LTV - Fixed 4.74% - 10/30 5 Years IO
$24,003,000
Acquisition & CapEx 80% LTV - Fixed 4.57% - 10/30 5 Years IO GreggWallace, President AMA Financial, LLC 610-784-0400 x11, gwallace@amafinancial.com www.amafinancial.com
$13,360,000
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