19 months into the recession of the late 2000′s the world of commercial real estate is rapidly changing. The expected is occurring in our industry: Lenders are tightening controls and underwriting to try and shore up balance sheets. Investors and developers are being required to put in far more equity than they have grown accustomed to which has led to a spike in the demand and cost of equity. Neither of the aforementioned contribute positively to the large disconnect between buyers and sellers pricing. The latest statistics I have seen to date regarding lending for assets is as follows:
Anchored Retail 55 – 65% LTV
Rates: 10 yr Treasury + 400-450 spread
Strip Center 55 – 60% LTV
Rates: 10 yr Treasury + 450-550 spread
Multi-Family (non-agency) 65 – 70% LTV
Rates: 10 yr Treasury +275 spread
Multi-Family (agency) 70 – 75% LTV (most aggressive)
Rates: 10 yr Treasury + 250 spread
Distribution/Warehouse 60 – 65% LTV
Rates: 10 yr Treasury + 400 spread
R&D/Flex/Industrial 60 – 65% LTV
Rates: 10 yr Treasury + 450 spread
Office 55 – 65% LTV
Rates: 10 yr Treasury + 360 spread
Hotel 50% LTV
Rates: 10 yr Treasury + 500 spread
I am confident that over the next year opportunities will arise in all
of these asset classes. Even the much feared 1 night lease hotels can
be bought at a proper basis and once the economy revives can be very
profitable investments. Prudence, cautious optimism and perseverance
are what will get us through these tumultuous times.
Cheers,
John pharm order discount Schonborn
Similar Posts:
- Builders Corner: Workouts
- Builders Corner: Negative Leverage
- Barry Sternlicht on Branding and Social Media
