Commercial Property News - November 2008 - (Page 23)

INDUSTRY PULSE FINANCE to improve returns and life insurance companies and pension funds may become more active in the mezzanine lending and preferred equity arenas. Whatever the case, due to a reduction in the number of commercial real estate lenders, strict under—Edward Padilla, NorthMarq Capital Inc. writing is likely to continue to be the order of the it does not return,there are no obvi- day. “Borrowers are going to have ous financing mechanisms of com- to have their houses in order,” parable size that could take its Carroll warned. place. “Life insurance companies Lenders with capital, of course, are conservative,and banks are mer- are in a better position. “This is a curial,” Padilla stated. “They are terrific time to be a lender,” either in the market or they’re out.” declared CBRE Capital Markets Lenders are offering lower president Brian Stoffers. “Where leverage amounts on commercial lenders were doing loans at 100 properties across the board, so basis points over (U.S. Treasuries) some hedge funds have become at 80 percent loan-to-value, now enthusiastic mezzanine lenders. the range is 300 to 400 basis points But they may change their game over at 60 percent loan-to-value.” Indeed, the CMBS freeze-up will plan, said Cohen Financial managing director Christopher Carroll. mean a sea change in the relationOn the other hand, hedge funds ship between borrower and lender, may become more interested in according to Duke Runnels, CEO of boosting their equity investments FORT Properties Inc., which targets “(Investment banks) were the innovators in the early ’90s and were largely responsible for bringing capital to the system.” commercial real estate investments between $10 million and $75 million. “The originator has become a lender, and there is a difference,” Runnels said.Now that lenders have to hold loans on their books, they want to know a great deal more about who they are lending to, he said. “Bankers and borrowers have to look each other in the eye and trust each other.” FORT Properties seeks properties that have stories that lenders will buy into. “(Securitization) Just saying, “This building is in a great location,” is is like a forest not enough, Runnels statfire. After (the ed. “It’s got to be a deal forest) burns that the lender is going to down, new plant brag about—to his board, to the community.” species start For hotel developers, the to grow.” conservative lending land—Jeff Friedman, Mesa West Capital scape is difficult to navigate, NEW! COMMERCIAL REAL ESTATE LOAN PROGRAM! • No Prepayment Penalty Available • Highly Competitive Rates and Terms • 30-day Closing • $500,000 to $5,000,000 Loan Balance • Interest Only Option Available SMARTER MONEY™ CHRISTINA LAREZ – 310.614.1133 clarez@securitypacificbank.com STAN BLITSTEIN – 818.836.2501 sblitstein@securitypacificbank.com * rates subject to change FDIC 23 www.cpnonline.com • November 2008 • COMMERCIAL PROPERTY NEWS http://www.securitypacificbank.com http://www.corfac.com http://www.corfac.com http://www.cpnonline.com

Table of Contents Feed for the Digital Edition of Commercial Property News - November 2008

CPN - November 2008 Contents Starting Line Seniors Housing Data/Analysis Conferences Through the Fog CPN’s Top Cities for Investment & Corporate Relocation Finance International Sustainability CPN-Nielsen Claritas Special Report

Commercial Property News - November 2008

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