In what I see as a very positive development for the economy, investor loans are beginning to open up again. I was speaking to a contact at CIBC World Markets and he was telling me that they are opening up conduit lending in a few weeks. That is big. As the Capital markets open up to lending, it will flow through to every phase of this economy.
Some conduit lending is already available. And the rates at this time are unbelievable. For apartment complexes it gets even better. Non-recourse apartment loans are now available with 10 year rates in the low to mid 4% range. This is the agency paper, meaning FNMA and Freddie and FHA. Loan sizes about $1 Million and up. Non-agency is once again available in major markets with NO Recourse! Loan sizes really need to be $2 Million and up for that product but the rates are in the low to mid 5’s fixed for 10 years! NNN office space, grocery anchored retail and class A office may also qualify for non-recourse loans at these same great rates. The important thing is that these loans are becoming available again. For a while, they were all but gone. With rates this low, it is an awesome time to buy investor commercial property and I have seen a big pick up in apartment deals in Atlanta and throughout the country. The larger deals are happening again!
And this past week, I created a relationship with an incredible private hedge fund out of NY that is focusing on the investor market as well. They will go beyond the major metros to any area that is a growing market. If the economy and property values are still tanking in your area, this fund will not be an option but for all major metro areas and sub-markets that are growing like many parts of Texas, North Carolina, etc. this is an incredible loan product. They will go down as low as $500,000 in loan size, rates start at 5.25% for a 10 year fixed, with a 25 year amortization. They will go to 80% LTV on apartment complexes and 75% on retail/office/industrial. And here is the kicker, they do NOT delineate as far as refinancing or purchasing when they look at LTV. So you can take cash-out on a deal possibly up to 75% LTV on retail/office or 80% on apartments. And rates in the low to mid 5’s! WOW!
As a result of all this, volume is picking up again. In fact, we are slammed with deals. And that activity will filter to other parts of the economy. Are all the problems fixed? Not by a long shot. There are still a ton of properties that are upside down and struggling and it will take years to get through all the bad paper. But with the bank’s willingness to sell and discount the notes, with rates this low and investors beginning to buy again, and the big capital markets opening up, the seeds of recovery are in place. For more information, or to discuss a property that you are buying or need to refinance, just give me a call. I can usually tell very quickly whether I can help you or not and with just some basic information, can get you an approval in writing in 72 hours. We are fast, we are nationwide and we are closing loans. Brian Peart
If you find this information to be helpful, please connect with me by going to the “Connect With Me Box” on the top right side of my blog.
Wishing You the Best,