Some more green shoots are visible as the bridge lenders are starting originations also. The warehouse lending market (big banks lending to debt funds) has started up again, with more cautious leverage. The warehouse lenders will also monitor loan collateral more closely. The difference between a commercial mortgage banker and a commercial mortgage banker is…
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The time to buy is when there’s blood in the streets. — Baron Rothchild, 1815, Member of the Rothchild banking family. There is an interesting story about this quote. Baron Nathan Rothchild was one of five sons of Mayer Amschel Rothchild. Mayer was the founder of the famous and incredibly wealthy Rothchold banking family. They…
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The Coronavirus Crisis is now the fourth commercial real estate crash that I have experienced in my forty years of running our family commercial mortgage company, Blackburne & Sons. They seem to happen about once every twelve years. Each time commercial real estate fell by exactly 45%. To those of you who are commercial loan…
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Conduit loans, also known as CMBS loans, enjoy a fixed rate for a whopping ten years. Unlike a fixed-rate commercial loan from a bank, there is no rate readjustment after five years. The rate is fixed for the entire ten years. And with ten-year Treasuries at just 0.79%, there has never been a better time in…
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George Smith Partners recently released a tombstone about a commercial loan closing that used a financial term of which I had never heard: “George Smith Partners arranged $23,750,000 in bridge financing for the refinance of a 229-key, full-service hotel located in Downtown Minneapolis, Minnesota… The Property, built in 1986, underwent a PIP in 2017.” What…
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When a bank makes a commercial construction loan, it is certainly not going to take all of the risk. A bank will usually require that the developer cover at least 20% to 30% of the total project cost – land cost, hard costs, soft costs, and a contingency reserve equal to 5% of the hard…
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I have a great training article about commercial loans for you today. How do conduits price their commercial loans? After all, commercial lenders cannot buy a forward commitment from Fannie Mae or Freddie Mac, like a residential mortgage banker; yet most commercial loans today are fixed rate loans. How on earth do the commercial loan…
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