Although the current status of the commercial mortgage
market leaves a lot to be desired, we are optimistic things will improve during
2009. The Wall Street conduit lenders have not re-entered the market, and
will likely remain on the sidelines for the entire year. Banks and Life
Companies will be the main sources for short and long term debt, with many
borrowers taking on mezzanine debt or outside equity in order to structure a
deal. While many Banks remain out of the market, there are still many
that will offer good short-term (1-5 years) financing options to strong
borrowers. Life Companies continue to offer longer term fixed rate debt,
although at very conservative loan-to-values. This is something we anticipate
to “loosen up” however, as alternative investments to commercial
mortgages become less attractive to these institutions. Short term rates
seem to be holding in the 5-7% range, while longer term rates have settled in
the 6.5-7.5% range. There don’t seem to be many forces that will
raise rates in the short-term, so as lending criteria becomes slightly more
aggressive we should see a good time to borrow this Spring and Summer.
One thing will remain constant this year, and that is a flight to quality in
terns of properties and borrowers.
Guest Commercial Loan Post by:
Mark Jeffries
Vice President
Q10 | Essex Financial Group
8400 E. Prentice Avenue, STE 910
Greenwood Village, CO 80111
Direct: 303-843-4023
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