Sara Havlena

Multifamily construction lending will be strong this year as borrowers look to capitalize on rates while they remain relatively low.  Congress’ recent attempts to reform the HVCRE regulations will affect how banks of all sizes compete for multifamily construction loans going forward.  The original framework was vague, so now Congress will attempt to tighten the More

Watch for life companies, banks and CMBS lenders to pick up retail market share this year despite some recent bankruptcies in the sector.  Underlying macroeconomic fundamentals that support retail performance are strong, especially in established MSAs and up-and-coming markets in the Sunbelt and Pacific Northwest.  Leverage can reach as high as 75% for any retail More

Hoteliers will see a plethora of new bridge lenders enter the scene this year in their search for yield.  Bridge lenders will have a strong overall appetite for hotels with aggressive pricing and strong leverage, but they could pull back quickly if there are declines in market-wide RevPAR.  Senior lender underwriting will be more cautious More

Keep an eye out for more capital available from banks, life companies and CMBS lenders for office, especially as rents trend up in many markets.  Lenders will also start to dip their toes into more office deals as lenders take a step back from retail and competition for multifamily and industrial increases even further.  Borrowers More

Count on plenty of construction lenders to be active this year, although the lack of new land sales will lead to less overall projects in the pipeline.  As this cycle continues, banks will become more risk-averse.  Also, expect an increase in construction costs and moderating rents over the next six to 12 months.  This means More

Watch for average rates to be anywhere from 0.25% to 0.5% higher by the end of this year.  The consensus is that the economy is at the bottom of the low interest rate cycle.  The market will either see a slow increasing of rates or possibly a more moderate pace throughout 2018.  The Fed indicates More

Keep an eye out for bridge, debt fund and private lenders to be the most active in land lending this year.  Demand for financing is high, but many lenders need to wait for existing loans to be paid off beforere-entering the game.  Banks will continue to play in the space but exclusively with the strongest More

Hotel lenders will be cautiously optimistic this year targeting experienced hoteliers and cash-flowing properties with major flags in strong markets.  Borrowers will see tighter underwriting and lower leverage in the coming months.  Leverage will top out at 70% for perm deals, although most lenders will prefer a 60% to 65% maximum.  Construction loans will max More

Count on an influx of capital coming to the retail sector, as many bridge lenders aggressively increase their 2018 allocations.  Look for specialty finance companies, debt funds and banks to be active in addition to more life companies entering the playing field by year’s end.  This surge in competition will lead to lower spreads and More

Life companies, banks and CMBS lenders will seek self-storage properties this year as fundamentals remain strong.  The self-storage industry is stable with high demand driven by downsizing from the growing baby boomer demographic, particularly impacting warmer climate communities in Arizona, Florida, California, Nevada and Texas.  Lenders are not overweight with this property type in their More

Look for life companies, CMBS lenders, banks and the GSEs to all compete on multifamily deals this year. There will be a divide in the market; some lenders will go toward Class C assets in smaller markets to grab yield, while others will target core deals as capital in the value-add space overflows.  Rates will More

Count on a plethora of available pref equity dollars as the market will be flush with new capital this year.  Expect more players than any point in the cycle as investors that have traditionally been focused on JV equity now turn to pref equity and mezz to grab yield.  The pref equity and structured finance More