Category: Commercial Loans

CRE FINANCE OUTLOOK CONTINUES TO BRIGHTEN

    Last month we reported that the CRE financing market was looking up. This month we note that the trend continues. In a prepared statement April 28 following last month’s FOMC meeting the Fed announced that … “ Amid progress on vaccinations and strong policy support, indicators of economic activity and employment have strengthened. …  Inflation has risen, largely reflecting transitory factors. Overall financial conditions remain accommodative, in part reflecting policy measures to support the economy and the flow of credit (and cash) to U.S. households and businesses.” (Emphasis by Counsel Mortgage)   The Fed goes on … “The Committee...

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CRE FINANCE OUTLOOK BRIGHTENS

  Seventy-seven percent of participants in the CRE Finance Council’s latest survey believe the economy will perform well over the next 12 months. The CRE Finance Council’s Fourth-Quarter 2020 Board of Governors’ Sentiment Index brought a new uptick of optimism about the future of commercial real estate finance. *   CREFC’s Board of Governors consists of 56 senior executives representing the diverse facets of the lending and mortgage-related debt investing markets for CRE, including multifamily. In response to a key survey question on the overall outlook for the U.S. economy, a notable 77% of the Board indicated an expectation that...

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SBA LOANS – 7(A) & 504 – BOTH ENHANCED BY THE SBA

Earlier in this message we highlighted the SBA promotion (enhancements) of the 7(a) program as a tool to help small businesses during the COVID-driven economic decline. Many of the relief provisions under the CARES ACT elevate the SBA 504 program also, including fee reductions and an extension of payment subsidies for new 504 loans. In a nutshell …

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LENDERS RE-THINKING ASSUMPTIONS AS PANDEMIC CONTINUES

Now in mid-stream of the pandemic, commercial lenders are looking primarily at industrial, multifamily and selected office deals. But beyond that, other asset classes are drawing lesser interest, even though in some cases lenders are willing to stretch their comfort level. Some pandemic-driven re-purposing properties are being seen like life sciences conversion projects in nontraditional markets like Phoenix. With the talent present that supports the host of hospitals and medical related services, these projects are attracting attention of investors and lenders alike. While life sciences are currently hot, people are cooling off of other sectors. Investors need to distinguish between...

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WELCOME TO 2021 – WHERE TO GO, WHAT TO DO?

Problems in the hotel, retail and lodging sectors are pushing the commercial mortgage delinquency rate up. “November did see small increases in newly delinquent retail, lodging and office loans, but at levels far below what was seen at the outset of the pandemic,” Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research, said in a statement. Office property delinquencies rose from 2.0% in October to 2.4% in November. Offices may also see a transition after the pandemic as many workers have become accustomed to working from home. Companies will need to decide if they want their employees working from...

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CRE LENDERS ADAPT TO NEW MARKET DYNAMICS

Today’s post is written by Michael Green, Commercial Loan Originator for Counsel Mortgage Group, LLC. Capital markets remain healthy with a wide array of active lenders. As the nation progresses through the final months of the year, the lending landscape has vastly improved from the onset of the pandemic which brought lenders and investors to pause as they assessed the impact of COVID.  Access to debt capital, though, has been far more abundant than during the global financial crisis (2008-2009), with the Fed taking extreme steps to shore up credit markets and ensure liquidity. Following the Q2-20 uncertainty-driven investment slowdown,...

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APPLYING FOR A COMMERCIAL LOAN IN THE COVID ENVIRONMENT

  Lenders have raised the bar on underwriting guidelines in recent years, and more specifically in the COVID era. Back in the good ‘ole days, prior to the Great Recession and now COVID, lenders did what might be now described as a cursory job of underwriting the borrower. They typically asked for a simple financial statement, personal & business, with a credit check, and that was the extent of the credit items required. Back then, they focused almost exclusively on the pros and cons of the property. And if they liked the risks associated with the property, it was very...

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OUTSTANDING CRE DEBT CONTINUES TO INCREASE, IN SPITE OF TIGHTER CREDIT STANDARDS

  Today’s post is written by Michael Green, Commercial Loan Originator for Counsel Mortgage Group, LLC Credit is the lifeblood of the economy, therefore a substantial tightening in credit conditions could cut the current recovery short. The latest Senior Loan Officer Opinion Survey points to banks tightening credit across all major loan categories. But loans at commercial banks account for only about 30% of the total credit extended to the U.S. private non-financial sector. Debt capital markets are more or less wide open again, which has helped keep credit flowing to larger businesses, and to households indirectly.

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HOW BAD IS IT … ?

    Today’s post is written by Michael Green, Commercial Loan Originator for Counsel Mortgage Group, LLC. Commercial real estate (CRE) and multifamily loan originations fell almost 48% year-over-year in the second quarter, and 31% vs. Q1-20, the result of a pandemic-related temporary freeze in lending and transaction markets between mid-March through early April, according to the Mortgage Bankers Assn (MBA) quarterly survey. (How “temporary” is it?) Liquidity returned to the market later in the quarter, and multifamily-agency and certain industrial deals “were bright spots” during the three-month period (Q2), per the CBRE Lending Momentum Index. Other sectors suffered, however,...

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WHO HAS MONEY TO LEND, AND HOW DO YOU GET IT? WHY BANKS ARE PUCKERED

Today’s post is written by Michael Green, Commercial Loan Originator for Counsel Mortgage Group, LLC.   Commercial and multifamily mortgage bankers are expected to close $248 billion of loans backed by income-producing properties in 2020, a 59% decline from 2019’s record volume of $601 billion, the Mortgage Bankers Association (MBA) reported. Total multifamily lending alone, which includes some loans made by small and midsize banks not captured in the overall total, is forecast to fall 42% this year. MBA anticipates a partial rebound in lending volumes in 2021, with commercial/multifamily lending rising to $390 billion. “The ongoing COVID-19 pandemic continues...

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