Posts Tagged ‘mortgage originations’

Charles Krawitz on The Banking Comeback

Monday, April 8th, 2013

Charles Krawitz Instagram Image 2013On the latest episode of The Alter Group Podcast on Real Estate, Charles Krawitz used his 25 years of experience in financing of thousands of transactions, and the sale of highly distressed loans and REO assets to give us an inside look at the recovery of the banking sector.  Banks now hold 49% of all commercial real estate debt and mortgage originations for the sector spiked 24% last year.

According to Charles, larger and regional banks which were saddled with distressed assets after 2007 have worked through their backlog of delinquent loans and are winding down the special assets groups tasked with dealing with problem notes and REO assets. Now, banks are once again seeing prospects in multifamily, medical office and grocery-anchored retail.

He spells out the trends of lending with banks doing full-recourse 75% loan-to-values but with shorter terms – interim or bridge loans rolling into a 3-5 year mini-perm. On the other hand life insurance companies, which are doing more originations than before the recession, are doing 3-20 year loans with 60% LTVs. Conduits which topped $40 billion in 2012, are doing 10 year loans (albeit with  a preference for institutional-grade assets, higher-credit borrowers, significant equity).

Beyond lending from their balance sheets, banks are also procuring capital on behalf of their clients from sources such as the GSA, life insurance and the CMBS. According to Charles, being a third-party solutions provider to clients is one of the new frontiers for regional and larger banks.

To hear Charles Krawitz on the Banking Bounceback, listen to the latest episode of the AlterNow Podcasts.

Investors Showing Scant Interest in Mid-Tier Office Properties

Wednesday, August 18th, 2010

Mid-tier property transactions still awaiting recovery.  Although property investment – especially for trophy buildings – is coming back more strongly than industry analysts had anticipated, mid-tier properties are not yet enjoying a similar rebound.  According to Real Capital Analytics (RCA), properties valued at $20.6 billion were sold during the 2nd quarter of 2010, an 86 percent increase over last year.

According to Dan Fasulo, an RCA analyst, owners of mid-tier properties are having more difficulty finding buyers.  “Eventually the bidders who keep losing out on these competitions are going to readjust their expectations and will start to try other strategies, whether it’s investing in lower-quality property or going into a secondary market.  It’s inevitable.”

Declining vacancy rates also could create renewed interest in mid-tier properties, said Ryan Severino, an economist with Reis, which believes that national office vacancy rate will fall from its 17.7 percent peak this year.  “A lot depends on what happens to the office sector overall, but we are beginning to see the first glimmer of stabilization,” Severino said.  Still, financing for smaller transactions is difficult to obtain – a stark contrast with trophy property deals.

Some smaller community banks are willing to provide capital to owners of mid-tier properties.  In the 1st quarter of 2010, approximately 80 percent of mortgage originations refinanced existing projects, according to Randy Fuchs, a principal of Boxwood Means, a real estate analysis firm.  In contrast, refinancing comprised just 50 to 60 percent of loan originations in 2006 and 2007.