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    Deal of the Week: Ridge Avenue Apartments in Philadelphia

    Ridge Avenue Apartments was an 80% complete project where the construction lender stopped funding, and the borrower required a loan to complete and stabilize. The partially completed nature of the project and fact that the general contractor also had to be replaced posed challenges to the transaction. The Class B community was built in 2024 and includes 32 units.  More

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    Hoteliers will see more competition this year

    Hotel lending will pick up this year, especially as life companies, CMBS lenders, regional and big banks return to the space. Also, watch for the debt funds, bridge and private money lenders to continue swooping up market share. The result is more options and a competitive environment for borrowers. There will be an increase in leverage and more available subordinated debt. Terms will come down to the location, borrower and asset. There will be a push toward branded hotels with strong sponsors. Although, keep an eye out for more willingness to lend on riskier deals such as ground-up construction and heavy repositioning, as well as an increase in capital for independent hotels and resorts. More

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    Life companies are planning to expand their lending products in 2025

    Keep an eye out for more life company lending this year, as many lenders plan to surpass last year’s total origination numbers. Life companies will try to capture more business by expanding their boxes. Watch for them to be more flexible in the type of retail properties they will consider, moving away from the traditional grocery-anchored centers. There will be a push toward more construction-to-perm and bridge loans as a way to grab yield. Anticipate life companies starting to compete on pricing and increasing leverage. Also, count on more flexible prepayment options. Look for sensitivity around higher insurance costs. The focus will be on strong experienced sponsors. More

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    Multifamily construction will pick up steam

    Multifamily construction capital will increase as investors become more realistic with long-term rates and lenders are recycling capital as loans mature. Regional and local banks have started to re-enter the space, which should continue as rates decrease. Although financing will be available, lenders will be more selective and there will be a higher cost of capital. Anticipate a flight to quality for strong projects and experienced sponsors. The biggest hurdle is not being able to make the numbers work in today’s market. Caution around overbuilding and concerns about rents will continue to keep some lenders at bay. More

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    Lenders will be cautiously optimistic with office going forward

    There is a positive outlook for office lending this year with meaningful market improvements and increased liquidity. CMBS lenders are back and targeting office assets that are performing well in strong markets. Banks will slowly and selectively re-enter the space in 2025 with building sales, refinancings and loan sales removing office loans from their balance sheets. Life companies will have some appetite for newer quality office product at a lower leverage. There will be a flight-to-quality trend that should persist for well-occupied properties. More

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