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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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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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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...

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Super Towers…The Next Big Thing in Luxury Housing

Super Towers…The Next Big Thing in Luxury Housing

The residential tower under construction at 432 Park Avenue in Manhattan will have plenty of opulent amenities to draw the moneyed crowd: The units, which start at $7 million, feature private elevator landings, 12.5-foot ceilings, separate servant entrances, heated bathroom floors and the option to buy additional climate-controlled wine cellars and guest apartments. The building will have a 75-foot-long pool, a private restaurant for residents, room service and catering, even chauffeur service. But for all of the over-the-top features of the Rafael Vinoly-designed tower, the one sure to get the most attention will be its height. 432 Park Ave will jut 1,396 feet into the air over midtown Manhattan upon completion in 2015. At that lofty height, the building, developed by CIM Group and Macklowe Properties, will be New York City’s third-tallest behind One World Trade Center and the Empire State Building. It will also become the Western Hemisphere’s tallest residential tower, eclipsing the 870-foot rental tower New York by Gehry in Lower Manhattan, Midtown’s up-and-coming 1,004-foot One57, and Chicago’s 1,389-foot (spire included) Trump International Hotel and Tower. “People want views. This will be a game-changer for the upper echelon of New York,” asserts Jarrod Guy Randolph, a luxury real estate broker with CORE in New York who has toured the sales center, which has been kept under wraps since its discreet opening in March. Gallery: The World’s New Wave Of Tallest Residential Towers 432 Park Ave is the latest example of a race skyward among luxury residential developers. With the housing market in recovery mode, developers are taking multifamily buildings to staggering new heights, vying for the title of tallest tower and the prestige that translate into larger returns on investment while delivering the breathtaking views buyers are seeking. “What developers are looking to do is set themselves apart,” notes Randolph. “They are doing this because they can build that tall and capitalize on the land.” In the past, most of the world’s tallest buildings were erected to provide office space, like Chicago’s Willis Tower and the Empire State Building. The shift toward high-rise dwelling started about 15 years ago, according to the Council on Tall Buildings and Urban Habitat, as interest revived in living in city centers....

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Top 10 Fastest and Slowest Growing Cities in America

Top 10 Fastest and Slowest Growing Cities in America

Article by, Joel Kotkin, Contributor Forbes Since the housing crash of 2007, the decline of the Sun Belt and dispersed, low-density cities has been trumpeted by the national media and by pundits who believe America’s future lies in compact, crowded, mostly coastal and northern, cities. But apparently, most Americans have not gotten the memo — they seem to be accelerating their push into less dense regions of the Sun Belt. An analysis of population data by demographer Wendell Cox, including the Census report for the most recent year released late last week, shows that since 2000, virtually all the 10 fastest-growing metropolitan areas in the United States are located in Sun Belt states. The population of the Raleigh, N.C., metropolitan statistical area has expanded a remarkable 47.8% since 2000, tops among the nation’s 52 metro areas with over 1 million residents. That is more than three times the overall 12.7% growth of those 52 metro areas. Austin, Texas, and Las Vegas also expanded more than 40%, putting them second and third on our list. The populations of the other metro areas in the top 10 all expanded by at least 25%, or twice the national average. This jibes nicely with domestic migration trends and growth in the foreign-born population, both of which have been strongest in many of these same cities. The most recent numbers, covering July 2011 to July 2012, also reveal some subtle changes in the Sun Belt pecking order. Over the 2000-2012 period, the growth winners   included places like Las Vegas, Riverside-San Bernardino and Phoenix, all of which suffered grievously in the housing bust. Although they all clocked population growth better than the national average over the past year, none, besides Phoenix, ranked in the updated top 10. Growth momentum has shifted decidedly toward Texas. Austin’s population expanded a remarkable 3% last year, tops among the nation’s 52 largest metro areas. Three other Lone Star metropolitan areas — Houston, San Antonio and Dallas-Ft. Worth — ranked in the top six and all expanded at roughly twice the national average. The other fastest-growing metros over the past year include Raleigh, Orlando, Phoenix, Charlotte and Nashville. One unexpected fast-growth area has been Oklahoma City, which ranked 20th between 2000 and 2012, but notched the 12th spot last year, with a growth rate 60% above...

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