Feed

Mortgage Observer

By Michael Stoler 5/31 11:34am

Mortgage Observer

Throggs Neck Shopping Center.

Development Projects Abound, But Boroughs Still Under-Retailed

New York City is the number one retail location in the world. Retailers from around the world flock to open flagship stores throughout the Big Apple. Apple’s store on Fifth Avenue, with its familiar cube, has the highest revenue of all Apple stores. Then there are the flagships of Uniqlo, Zara, Tiffany & Co., Bergdorf Goodman and a cast of others. Nevertheless, when you ask prominent owners of commercial real estate as well as local and national retailers, the general consensus is that the outer boroughs of New York City are severely under-retailed.

Eastern Consolidated’s Barbara Byrne Denham reported in May 2012 that retail sales per capita ratios for the outer boroughs were far below the national average. Brooklyn was 39 percent below, Queens was 40 percent below and the Bronx came in a whopping 60 percent below. Read More

By Damian Ghigliotty 5/31 8:00am

Mortgage Observer

Cover_gentrification

Brooklyn’s Retail Financing Redux: Hipper Shopping En Route

As the economy continues to build steam, a new Brooklyn finds itself craving a new retail culture—and developers and financers are keeping close watch. While New York’s most populous borough has seen a large number of residential buildings take shape in the past year, financing for retail construction projects and acquisitions are just now beginning to catch up.

When asked, the developers behind several of the latest big retail projects told The Mortgage Observer that many of those properties would have a more chic look and feel and a more versatile use than traditional shopping outlets and malls. One common point of comparison has been Jamestown’s Chelsea Market, the high-end urban food court and shopping center with galleries and production studios mixed in. Read More

By Joshua Stein 5/30 12:00pm

Mortgage Observer

Joshua Stein.

The Guarantor’s Dilemma

A mortgage lender hates the idea that the borrower might file bankruptcy. Thus, even if the loan is otherwise nonrecourse, the lender will often require the owner of the borrower to sign a “carveout guaranty.” Such a guaranty won’t activate unless, in part, the owner ever decides to put the borrower into bankruptcy. It gives the owner every incentive to keep the borrower out of bankruptcy. It should solve the lender’s concern and prevent voluntary bankruptcies, right? Read More

By Sam Chandan 5/30 9:59am

Mortgage Observer

Sam Chandan.

Retail Credit Quality Will Strain as CMBS Issuance Surges

Fueled by investors’ renewed appetite for risk and the relative stability of bond yields, CMBS issuance in 2013 is pacing far ahead of last year. By early May, volume had surpassed $30 billion, roughly three times the 2012 year-to-date tally. An uptick in the number of well-qualified borrowers is only part of the story. As it expands, the credit quality of the larger underlying pool shows signs of an increasingly flexible approach to underwriting. Too many investors are unfazed by the credit drift, largely content that anchoring to existing cash flow obviates risk along other dimensions. Fitted with blinders, those investors run the chance of being outflanked by new drivers of loss, including inadequate cushions against rising interest rates. As the cyclical attention to risk dissipates, a longer list of ratings agencies in the post-crisis era still brings fresh perspectives to the marketplace. It has also invited a new round of ratings shopping. Read More

By Alessia Pirolo 5/29 4:02pm

Mortgage Observer

Chera brothers.

Cartier! Versace! Vuitton! Financing Next Gen at Crown’s Ritzy Retail Focus

One day in the late 1980s, three Brooklyn brothers in their teens—Isaac, Haim and Richard Chera—followed their grandfather, Isaac, and their father, Stanley, on a trip to Manhattan. While not in school, the brothers would spend much of their spare time in the Fulton Street children’s clothing store that their grandfather had opened in 1948, in a space formerly occupied by a hat store, Suzette Millinery Shop. At the time, lacking the money to replace the previous banner, Isaac Chera simply tweaked it, naming his business Suzette Kiddie Store. Only later, after having expanded to several other stores, did the family change the name to Young World. Soon, the elder Isaac Chera started to invest in real estate. The best advice he gave to his family, according to his grandson, Haim, was to always buy the building where they had a store. Read More

By Carl Gaines 3/27 2:00pm

Mortgage Observer

Steve Kohn.

Q&A: Steve Kohn, president of Cushman & Wakefield’s Equity, Debt & Structured Finance Group

The Mortgage Observer met with Steve Kohn, head of one of three service lines under the capital markets department at Cushman & Wakefield. Mr. Kohn shared his outlook for 2013 and details about he types of deals his growing group is busy working on.

The Mortgage Observer: How did you get your start in the industry?

Steve Kohn: My first job in real estate was with Reliance Development Group, which was a subsidiary of Reliance Insurance in Philadelphia. The president of Reliance Development Group was a gentleman named Henry Lambert, who still is very active in real estate here in New York City. He hired me, and I actually worked for his other business—he had a food business called Pasta & Cheese. I worked for the summers at Pasta & Cheese, and then when I graduated college, I knew that he had a big job in real estate.

What were you doing for him? Read More

By Michael Stoler 3/27 1:00pm

Mortgage Observer

indepth

Many Lenders Offering Low Rates for Multifamily

It seems like the perfect storm: investors are paying record prices to acquire residential rental apartments in metropolitan areas. And at the same time, financial institutions—especially regional and local commercial and savings banks—are offering the lowest rates for long-term financing for this asset class. Ramping up the competition, Fannie Mae, Freddie Mac, insurance companies, CMBS and conduits are all offering borrowers low rates, with terms we have not experienced in decades. Read More

By Sam Chandan 3/27 7:00am

Mortgage Observer

Sam Chandan.

Qualifying a CMBS Rebound: What an Explosion of New Deals Implies for Credit Quality

CMBS issuers are on a roll. The best January on record has propelled first-quarter 2013 volume past $20 billion, a milestone that has otherwise eluded the market for more than five years. Few issuers expect a slowdown in activity over the next year. Both for fusion deals and single-asset transactions, securitization has become an increasingly more competitive option as spreads have narrowed. The single-asset market has leapfrogged the recovery in multi-borrower deals and is on track to surpass its previous peak. After years of middling progress, the CMBS market overall is reasserting itself as investors’ tolerance for risk-taking recovers. Read More

By Alessia Pirolo 3/26 2:00pm

Mortgage Observer

Jeffery Hayward.

Fannie Mae Multifamily Head, Agency Vet Jeffery Hayward

When on the road, Jeffery Hayward often carries a personally customized guide, with the addresses of all the multifamily buildings that Fannie Mae has financed in the area. Then the head of the government-sponsored enterprise’s Multifamily Mortgage Business drives from building to building.

“I want to see what we are financing,” Mr. Hayward told The Mortgage Observer recently, during a series of meetings in his Washington, D.C. office. “I have actually walked a lot of the properties that we financed—I know what they look like, I have seen the tenants.” Read More

By Damian Ghigliotty 3/26 12:00pm

Mortgage Observer

NJ Multifamily Harvest

New Jersey Lenders Locked in Competition for Multifamily Assignments

The Garden State has become fertile ground for developers, and commercial real estate lenders both large and small are looking to get in on the action, while others are looking to retain and expand the market share they already have.

Competition among lenders is quickly growing as more people look to rent in New Jersey, the most urbanized state in the country, 94.7 percent of whose population is centered in urban areas, according to 2010 figures from the U.S. Census Bureau. That abundance of multifamily properties just west of the Hudson River coincides with university expansions, new retail and office properties and other large real estate projects throughout the state.

Brian Whitmer, a senior director in investment sales for the New York tristate area at Cushman & Wakefield, works out of northern New Jersey and went through the pipeline of multifamily developments he sees in the works there. Of the 22,968 units he found in the pipeline in northern New Jersey, 59 percent, or 13,538 units, are in the Gold Coast—areas along the Hudson River like Jersey City, Hoboken and Weehawken. Read More

By Joshua Stein 3/26 7:00am

Mortgage Observer

Joshua Stein.

Mezzanine Lending, Post-Crash

How do you know when the commercial real estate financing market has gotten out of control and become irrationally exuberant?

If you’re a mezzanine lender, you look for three things. First, have non-real-estate players such as hedge funds started to come into the mezzanine debt market? Second, has the deluge of new players caused a substantial drop in pricing? And third, are other funding sources offering to finance mezzanine lenders on very favorable terms? Read More

By Carl Gaines 2/06 9:36am

Mortgage Observer

Rosemary Vrablic.

Deutsche Bank’s Rosemary Vrablic and Private Banking’s Link to CRE Finance

Got a chunk of change lying around? With a book of business north of $5.5 billion, Rosemary Vrablic, a managing director in the asset and wealth management division at Deutsche Bank, can help.
Private banking is loosely defined as personalized financial services offered by banks to their high-net-worth clients. And the top providers are largely holding steady, according to 2011 year-end results from U.K.-based private wealth management consultancy and research firm Scorpio Partnership. Read More

By Michael Stoler 1/11 4:35pm

Mortgage Observer

Lenders Fairly Satisfied with 2012 Results

As the final hours and minutes of 2012 ticked down, a number of the leading bankers who provide real estate financing were taking stock of 2012’s results. A majority of those reached for comment conceded that they had reached or exceeded their expectations. Nevertheless, they said, with the year coming to a close, they must once again prepare to start from zero to reach new goals. Read More