Mortgage Observer

Natixis and UC Funds Lend $27M to Convert Historic Baltimore Office To Apartments

Equitable Building in Baltimore

Long Island-based JK Equities closed $27 million in construction funds from Natixis Global Asset Management and Boston-based UC Funds, to redevelop a historic downtown Baltimore building, Mortgage Observer has learned. The three-year, 4.91 percent loan closed earlier this week.

The Equitable Building, at 10 North Calvert Street in Baltimore, dates to 1891 and was acquired by JK last November for $7.2 million, according to published reports. The loan proceeds helped fund the acquisition and will also help with the $32 million bill to renovate the property, currently an office building, into 188 market rate residential units.The redevelopment will also include 25,000 square feet of retail, said Jerry Karlik, the president of JK Equities. Read More

Mortgage Observer

MBA Report Shows Increased Lending Across All Property Types in 2013

Money_Cash

Commercial mortgage origination exceeded expectations in 2013, with $358 billion in loans on commercial and multifamily properties closed, according to the annual origination summation report from the Mortgage Bankers Association.

The report, unveiled earlier this week, showed banks invested $100.5 billion last year–28 percent of the annual volume–while CMBS, CDO and ABS issuers invested $79.8 million, which accounted for 22 percent of the overall volume amount. Life insurance companies and pension funds did $60.2 billion in deals—17 percent of the year’s total. Read More

Mortgage Observer

Trepp Launches Bond Pricing Product TreppTrade 

Trepp launched TreppTrade today

Commercial real estate information company Trepp launched a new tool which tracks bond cashflow and price yield calculations, called TreppTrade Quick Analysis today, Mortgage Observer has exclusively learned. TreppTrade is accessible via trepptrade.com as well as proprietary trading and risk management platforms used by the broker dealer community, according to a representative for Trepp. Read More

Mortgage Observer

The Weakening State of Underwriting

Sam Chandan

The commercial real estate finance industry has entered 2014 with a renewed sense of confidence. The incautious tone at the first quarter’s outlook conferences belies the industry’s recent history and the losses incurred on precrisis lending activities. Instead, heady predictions of higher lending volumes are being proffered as unequivocally positive signs of better days ahead.  More is better in the mundane calculus, and the next year will undoubtedly see more lenders in more places enabling investment by a wider range of borrowers. We are hard-pressed to show serious evolution in our approaches to credit risk measurement. But as long as we ignore that capital flows and the cost and capacity for leverage influence prices and risk-taking, there is no cause for a more prudent analysis.

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Mortgage Observer

Commercial Real Estate Lenders Reaching, or Exceeding, 2013 Expectations

InDepth

December is typically a time when real estate leaders, especially the bankers who provide financing for commercial real estate transactions, allocate many evenings to attend year-end holiday parties.

One of the questions on the minds of many in attendance at these elaborate events this year will no doubt be whether the financial institutions have reached or exceeded their goals in providing funding for real estate transactions. One thing is certain: CMBS investment bankers have exceeded last year’s output, yet it is not certain if the Wall Street shops will reach a $100 billion in gross lending. There are also the traditional savings and commercial banks, mortgage REITs, private equity funds and insurance companies, as well as new players in town who joined and/or increased their volume of financing this year.

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Mortgage Observer

Life Companies Face Renewed Competition

Sam Chandan.

The initial recovery in commercial real estate investment activity has been rewarding for life company lenders. Absent robust competition to originate mortgages to institutional borrowers, life companies have expanded their share of the secured debt market while working to hold the line on underwriting standards. It has not been a volume game. The enhanced liquidity from life company lending has been narrowly focused, with the lion’s share of the benefits accruing to a privileged class of well-heeled borrowers. In this segment of the market, life companies offer their most competitive terms. As debt market conditions improve, they are butting up against other lenders. For life companies, this more crowded landscape is a counterweight to improving economic projections and growth in the number of qualified borrowers.

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Mortgage Observer

Experts: Commercial Real Estate Has Returned to 2007

2007_InDepth

It is hard to believe that it was just a few years ago—specifically in 2007—when a perfect storm of positive events was taking place in the financial and real estate markets. The S&P 500 reached record highs, CMBS transactions grew to nearly $770 billion, the Blackstone Group completed its $39 billion purchase of Equity Office Properties Trust and then sold eight buildings in the Equity Office portfolio to Harry Macklowe for $7 billion, foreign investors were purchasing commercial real estate at record levels and everyone was purchasing residential condominiums. In short, happy days were here again.

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Mortgage Observer

Lawyer’s View: CMBS

Michael Gambro.

Michael Gambro

Cadwalader, Wickersham & Taft Co-Chair of the Capital Markets Department

Cadwalader has provided lead counsel services in several of the largest single-borrower CMBS transactions ever. What kinds of challenges have those deals presented?

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