24A — April 27 - May 10, 2012 — Spring Preview — Mid Atlantic Real Estate Journal
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F inancing By Sam Berns and Ernie DesRochers, NorthMarq Capital 2012 commercial mortgage bankers conference highlights
A
tlanta was the site of this year’s Commercial Real Estate Mortgage
Marq Capital met with over 60 of these organizations. These groups will shape the
know it’s highly competitive out there and we hope that we have the tools to attract the best financing opportunities”. OVERALL SENTIMENT This year’s conference stands in stark contrast to the “doom and gloom” of years back. Buzz words like “cash flows”, “income in place”, “good news structure”, characterized this year’s conference. Most lend- ers believe that barring any catastrophic events, positive commercial real estate trends which began in 2010 and took hold in 2011 will continue in
2012. This optimistic senti- ment was shared by most lenders who believe 2012 will provide excellent lending op- portunities. As cash continues to accu- mulate on most lenders’ bal- ance sheets, they are actively searching for yield opportuni- ties. We don’t believe this will result in a repeat of market peak behaviors, however, this will lead to higher loan to values, creativity, and a large spectrum of loan opportunities. The bottom line being that loan volumes will increase in
2012.
LENDER FEEDBACK AGENCY LENDERS
Bankers Con- ference. Over 3,000 attend- ees were at thi s year ’s c on f e r en c e representing Commercial M o r t g a g e Backed Se-
commercial real estate market f or the next year. Each lender i n d i c a t e d t h a t 2 0 1 2 will have in- creased allo- cations over
Last year NorthMarq placed over $3.2 billion in agency debt between Freddie Mac and Fannie Mae. Together these agencies contributed over $44 billion in 2011 for multi-family loans nationally. These low cost debt providers continue to be about 50 basis points less than most lenders and will lend up to 80% loan to value. We expect agency liquidity to remain strong as multi-family lending remains the bright spot under govern- ment conservatorship. CMBS CMBS lending continues to make a comeback as CMBS 2.0. Over $40 billion was placed in CMBS and agency debt in 2011. Most of the 25 CMBS platforms are seeking loan opportunities greater than $5.0 million with rates ranging in the 4.75% to 5.50% range. Loan to values remain in the 70% range, however they may go higher in certain situations. CMBS lenders expect soft or springing lockboxes, reserves, warm body carve-outs guaran- tors and single purpose bank- ruptcy remote entities. LIFE COMPANIES Loan sizes range from $3 million up to $50 million for most institutional grade prop- erties. Basic product types of apartments, retail, office and industrial continue to be what most life companies are seek- ing. Most life companies loan to values will max out at 75% for multi-family and 70% for other property types. 5-15 year loan terms with some 20/20 self-amortizing loans are avail- able. Some life companies are becoming more flexible with pre-payment penalties mov- ing from yield maintenance to declining balance. MEZZANINE & BRIDGE LENDERS Mezzanine lenders continue to fill the gap in the shortfall created by the aggressive lend- ing earlier in the decade. Fig- ure rates to be in the 8% - 12% range allowing loan to values to approach the 80% to 85% range. Bridge lenders continue to seek turnaround/distressed assets in the $10 million and up range. Depending on in- place cash-flows, loan to values will be in the 65% 70% range. These non-recourse loans are continued on page 25A
Sam Berns
Ernie DesRochers
curities (CMBS) lenders, life insurance companies, agency lenders, banks, mezzanine and bridge lenders. North-
2011. The overall attitude was extremely positive and was best stated by one lend- ing group that stated, “We
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