As we enter the autumn season, our team has a few insights and trends that we want to share with you.

• The Federal Reserve is expected to begin to slow (“taper”) their US treasury and mortgage bond purchases in November.

• Interest rates have already started to rise in anticipation of the Fed’s tapering, with the 10-year rising to 1.48% today (from 1.28% two weeks ago), with further increases seeming probable.

• Lenders currently have substantial dry powder, so they may continue offering aggressive loans in the immediate term, but borrowers should expect a tighter market as the tapering continues. 

Property Type Challenges

Although some property types can currently be challenging, the property type itself isn’t fatal. We recently placed:

• 65% LTV cash-out refi loan,
• interest rate fixed for five years at 3.35%, and
• secured by a non-flagged resort hotel. 

The stellar recent property performance in conjunction with strong sponsorship helped the lender get comfortable with the risk profile.

Multifamily Equity

Twice since the end of last year, we’ve placed $4-5 million of equity (from the same investor) with two different Sponsors. In one case, it was structured as 90/10% JV Equity with a typical cash flow waterfall for an acquisition of an existing stabilized multifamily property. In the other case, it was structured as Preferred Equity (without any of the typical rigid structure and control rights usually required with preferred equity) with a fixed return for an investment in re-capitalization of a newly-constructed stabilized property. In both cases, the investor targeted a 14% IRR. 

If you're looking for creative capital for your next project, contact us. We're happy to help you find the right creative debt and equity capital solutions for your needs.

Over the years, our team has arranged financing for our clients to build, renovate, and effectively manage their real estate investments.

Here are a few examples of how we have helped our clients through creative debt and equity solutions:

Do you have a project in mind? Contacting us is the first step to receiving the creative capital you need.

A new factor is rising in importance for commercial properties – quality connectivity.

Tenants expect commercial buildings to provide reliable, high-speed, customized internet access.

Connectivity is an essential feature that satisfies tenants’ requirements and ultimately affects commercial building occupancy rates.

A 2018 WiredScore report found that 90% of tenants in major metropolitan areas ranked location as the most important factor when leasing office space.

87% ranked internet connectivity as the second most important factor.

So how does this shape the future of commercial real estate? Read the full article by NAIOP to find out.

Green financing, or eco-financing, is a structured financing activity that is focused on ensuring a better environmental outcome.

According to the World Economic Forum, "It includes an array of loans, debt mechanisms and investments that are used to encourage the development of green projects or minimize the impact on the climate of more regular projects. Or a combination of both."

Green financing offers a new wave of incentives for green property upgrades, as well as new builds, and has far-reaching implications for investors, developers, and financers.

So what upgrades can be made with green financing? And what limits do certain green loans have? Read the full article by Multi-Housing News to find out.