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Report: Troubles Ahead for Commercial Real Estate Loan Refinancing By Damian Ghigliotty

With an estimated $1.4 trillion in commercial mortgages due to mature between 2014 and 2017, lenders and investors may be in for a flood of refinancing that could present new challenges for the market, according to a December 2013 year-end Trepp report. Northeast states, including New York, New Jersey and Connecticut, contain the greatest volume of loans due to mature between 2014 and 2017 at a total near $100 billion. The Northeast region represents 30 percent of all maturing loans, followed by the Pacific and Southeast regions, each with close to 20 percent. The Midwest, Southwest and Mountain regions each represent less than 15 percent of maturing loans, according to the Trepp report. CMBS loans make up one fourth of the total, with $346 billion in CMBS loans due to mature before 2018. The Outlook by Asset Class Retail borrowers looking to refinance in the next few years may face the greatest uphill battle, with loan-to-value ratios for loans maturing between 2014 and 2017 consistently higher than those of recently originated loans. Additionally, continuing economic volatility and heavier taxes have taken a toll on the country’s retail sector, which may impact lenders’ willingness to refinance maturing loans. In almost every region of the United States, retail borrowers looking to refinance may have the hardest time meeting current LTV requirements. Office borrowers are likely to see a steady rise in LTV ratios between 2014 and 2017. As a result “refinancing troubles could emerge in 2015, barring significant property value appreciation or a loosening of underwriting standards,” the report states. By 2017, office borrowers in the Midwest region will face the greatest challenges, followed by borrowers in the Northeast, Southeast and Mountain states. Industrial borrowers too may begin to face their biggest refinancing problems come 2015. Many of those borrowers will be well positioned in 2014 with LTV ratios for maturing loans comparable to those for recently originated loans. In the following years, however, LTV ratios will likely peak, exceeding 75 percent in 2016, making it harder for industrial borrowers to refinance. Hospitality borrowers are relatively well suited this year and next. Borrowers looking to refinance loans for lodging properties should have little trouble meeting LTV requirements in 2014 and 2015. Come 2016...

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7 Keys to Raising Joint Venture Equity

Finding Joint Venture Equity has always been one of the most difficult things to do. To help you along with this process, we thought we would share an article that was written by one of our strategic partners. Article by, Brent Virkus of Find the Capital Look we all know raising joint venture equity is not easy. This is actually a good thing. Because if it were easy, everyone would raise capital and start a business, buy commercial real estate as an investment, etc. Competition would be ferocious. For this article, I’m going to focus on raising joint venture equity for your business. So to better help you with this process I’ve put together the 7 things you must know to raise joint venture equity today.   First…and Most Importantly Have “Thick Skin” When raising joint venture capital, be prepared for a lot of “no’s.” Using my Google example, even when Google was ready for venture capital, the majority of venture capitalist said “no.” When an joint venture capital says “no,” it doesn’t necessarily mean that your venture is not a good one. It simply means that the venture is not a good investment fit for them. You must have “thick skin” and be able to bounce back from lots of “no’s” and persevere. When failing over and over again to create the light bulb, Thomas Edison famously said, “I have not failed. I’ve just found 10,000 ways that won’t work.” Have the same mentality with investors. That is, think, “I have not failed. I’ve just found 100 investors that aren’t a good fit.”   Second…Make Sure you do a Business Plan and Keep it Current One of the most important things to show in your business plan is what you’ve accomplished in your business to date. And ideally, every month you are accomplishing more. So, be sure to update your plan with this progress.   Third…Always be a Master Marketer of your Deal In raising money, the best company doesn’t always win. Rather, the guy that knows how to best market his opportunity wins. That is, the entrepreneurs that are best able to market their companies to lenders and investors are the ones who raise the money.   Fourth…Understand That...

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5 Benefits to using a Mortgage Broker

5 Benefits to Using a Mortgage Broker Article by John Csaszar, November 7, 2013 Are you thinking about buying a new commercial property, multi-family property or looking to refinance your existing loan? Have you started exploring your financing options for the project? There are many different types of loans available to select from, but one of the first things you will need to determine is whether you want to work with a Commercial Mortgage Broker or with a bank or a single lender. Here’s a look at some of the benefits associated with working with a Broker rather than a bank. Benefit #1: A Broker Works for You One of the greatest benefits to working with a Commercial Mortgage Broker rather than a bank is the fact that the Broker works for you. When you go to a bank or a lender to secure a mortgage loan, the bank specialist is solely concerned with the interest of the financial institution. The Mortgage Broker, on the other hand, is looking out for your best interest and can provide hundreds of different, creative options for you to use in financing a property. You truly benefit because Mortgage Brokers are not employees of a particular bank or lender, but instead have a working relationship with dozens of these institutions. Benefit #2: Choose from a Wider Variety of Institutions When you go to a bank to inquire about a mortgage loan, the bank specialist is only representing one financial institution. When you work with a Mortgage Broker, he or she works with a wide variety of different institutions. As a result, you have a broader range of loan options to select from. Not only can this help you to get the best rates, but it also increases your chances of obtaining approval even if you have poor credit. Benefit #3:Brokers are Highly Trained When looking for funding, it is vital to secure the best financing available. Every borrower is unique and every lender has its own rules and programs. The difficulty most people have in shopping for their own loan is they don’t know all the right questions to ask. Adding to that difficulty is the fact that most lenders have only two...

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It looks like interest rates are going up. It may be time to Refinance.

  Submit Capital Request   Federal Reserve Chairman Ben S. Bernanke is putting investors on notice that the central bank is prepared to begin phasing out one of the most aggressive easing programs in its century-long history later this year. The Fed will probably taper its $85 billion in monthly bond buying later in 2013 and halt purchases around mid-2014 as long as the world’s largest economy performs in line with Fed projections, Bernanke told reporters yesterday in Washingtonafter a two-day meeting of the Federal Open Market Committee. “The vast, highly unprecedented, highly accommodative monetary policy stance that’s been so supportive of the recovery has begun to turn,” said Michael Gapen, senior U.S. economist for Barclays Plc in New York and a former economist in the Fed’s Division of Monetary Affairs. “The markets for the next several years or more will have to deal with the withdrawal of that support.” Stocks and Treasuries tumbled at the prospect of a wind-down in bond buying that’s swollen the Fed balance sheet to a record $3.41 trillion in an attack against the worst joblessness since the Great Depression. While citing waning risks to the economy, Bernanke said curbs to bond buying hinge on gains in the labor market and a pickup in growth. The yield on the benchmark 10-year Treasury (USGG10YR)note rose 3 basis points, or 0.03 percentage point, to 2.39 percent at 10:11 a.m. New York time after earlier climbing as high as 2.47 percent, the highest since August 2011. The yield jumped 17 basis points yesterday, the most since October 2011. Yields Surge Bonds across the Asia-Pacific region fell, with Japan’s 10-year yield climbing 4 basis points to 0.86 percent. The yield on 10-year German bunds rose 9 basis points to 1.65 percent. TheMSCI Asia Pacific Index (MXAP) of shares slumped 3.9 percent and the Stoxx Europe 600 (SXXP) Index slid 2.6 percent. The Standard & Poor’s 500 Index (SP1) fell 1.4 percent. Gold fell below $1,300 an ounce to the lowest in since September 2010. The conclusion to record stimulus may take years to complete as the Fed’s forecasts showed most officials don’t expect to begin raising the benchmark lending rate out of its lowest-ever range of zero to 0.25 percent until 2015. Bernanke, 59, whose second term as chairman ends on Jan....

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Promote Structures of the Most Active Real Estate Funds

Promote Structures of the Most Active Real Estate Funds

When negotiating with a private equity fund to provide you financing, it’s important to know what the funds internal hurdles are. This article highlights ten of the most active high yield real estate funds internal promote structure to help you with negotiating the best deal on your next real estate opportunity.

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