A — February 8 - 21, 2013 — Mid Atlantic Real Estate Journal
www.marejournal.com
F inancial D igest
By Brenner Green, Real Property Capital, Inc. The current commercial mortgage market
A
s I sit down to write my first article as the author of a column I
credit has eased significantly from the low point of 2009-2010. 2013 should be another banner year for mortgages. Here are four things to look out for over the remainder of 2013. 1. Conduits will continue their comeback - Asignificant event happened over the last couple of weeks in that conduit pricing eclipsed Fannie and Freddie for the first time since 2007. The conduits are back, and they are not going away. If you are borrowing $5 million or greater and a long term fixed non-recourse loan is important to you, you probably should be doing business with the
conduits if you are not already doing so. 2. Rate Creep - While I sup- pose I am sheepishly saying rates are going up, more specifi- cally I am saying that Treasury bonds are going to trade in a band that is higher and some- what tighter than where they have bounced around during the past eighteen months or so. I bet most of you would be surprised to know that the 10 year Treasury bond has traded in an relatively wide 80 basis point range betweenMarch and December of last year and a 101 basis point range over the last 12 months (according to Yahoo
Finance). This year, look for a 50 to 75 basis point range that doesn’t crack 1.75% again. 3. Bankswill do silly things – This is something that you can count on most every year, but because there is so much competition out there chasing the same asset class (multifam- ily), especially in our region, expect it to be acute this year. Now is the time to make a great deal on your refinance if you have been waiting or have been unable to get it done previously. The stories of the “cash-out” non-recourse apartment loan in a marginal neighborhood, or the owner-occupied deal at
2.5% for 10 years, will continue to be the subject of conversation in 2013. Overall, expect the general inconsistency and lack of stabilization in the banking industry to continue this year, largely to the benefit of bor- rowers. 4. Not all asset classes are doing great – While the world has been a great place for those in multi-family and student housing, suburban office and hospitality continue to suffer, albeit from different problems. Suburban offices (in most places other than the D.C. area) are suffering from a lack of tenants as a result of a fundamentally weak economy, while the hospitality sector is suffering from a lack of capital interested in the sector even though occupancy and ADR have shown strong improve- ment since the bottom of the recession. Stronger properties that outperform the market will be the deals that get done, but it will once again be a case of the “haves and have nots” in 2013. R. Brenner Green is a 15 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. n NEW YORK, NY — Strate- gicAlliance Mortgage, LLC, (SAM) announced that its members closed $9.4 billion in loan transactions in 2012, with a total of 1,067 transactions originating with 221 different lenders. Additionally, SAM member servicing volumes surged to $40 billion as of year’s end — an increase of 10% over the previous year’s volume. The figures represent an in- crease from 2011, when SAM members closed $7.6 billion in loans, with a total of 884 transactions originating with 190 different lenders. “We have experienced an astounding resurgence over the past two years, witnessed significant improvements in the lending climate, and are encouraged to see healthy lenders across every spectrum of the capital stack,” said SAM president Brock Walter, who is a founding principal with Pin- nacle Financial Group . n SAMcaps 2012with $9.4billioninclosed transactions
have followed f o r y e a r s , the state of things sure looks bright in the world of commer- cial real es- tate finance. Fifteen years
R. Brenner Green
in the industry and it seems appropriate to state that I am observing the beginning of my second boom cycle. Record low interest rates have created a huge demand for financing, and
Recent Closings
Office/Retail Refinance • Princeton, NJ $1,600,000
Student Housing • Bloomsburg, PA $30,000,000 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.
Subsidized Senior Housing • Branford, CT $2,240,000
FOR MORE INFORMATION: R. Brenner Green, President 75 East Butler Avenue • Ambler, PA 19002 610-456-9644 • bgreen@realpropertycapital.com www.realpropertycapital.com
Made with FlippingBook - professional solution for displaying marketing and sales documents online