Commercial Real Estate Finance

Posts Tagged ‘refinance’

World Cup fever has struck here at Llenrock.  With all this talk of England vs. USA, another great rivalry that has surfaced this week may be about to boil over, under the radar: is the other commercial real estate shoe going to fall off or not? There were two opposing views offered up this week by Jones Lang LaSalle’s (NYSE: JLL) James Koster, and Venable’s Gregory Cross. Let’s examine who had the upper foot…I mean hand. Read the rest of this entry »

Want to refinance your home to take care of historically low interest rates?  Hold your horses. Read the rest of this entry »

When I first started my career as an investment sales broker, a mentor taught me an effective method to have property investors reconsider their position in their properties.  While my goal was essentially to coax them into a selling frame of mind, there were myriad instances where selling simply did not make sense.  Yet, that didn’t mean there was no opportunity to do business with such a client. Instead of focusing on cap rates and price per square foot numbers, I could instead shift their focus from the stability of cash flow to the meager return they were receiving on the equity they had invested in the property.

“Mr. Property owner, I understand your building is full, you are free and clear of debt, the property is cash flowing well, and you want to pass the property down to your grandchildren.  But what is your return on equity?” Read the rest of this entry »

The credit crisis is beginning to mirror Congress.  Good ideas and solutions to problems are getting muddled by bureaucracy.  Much like global warming, or any other potential disaster, the government must act before its too late. And really there are only two outcomes to the credit crisis…what happens if market liquidity returns, and what happens if it doesn’t.

If market liquidity returns, real estate values will stabilize, in turn stabilizing banks’ balance sheets.  More balance sheet lenders would return to the market, which would cause CMBS yields to normalize, causing a restart to the CMBS market, which would make the spreads on refi’s fall.  With the glut of debt coming due over the next few years, this would be essential to providing more normalcy, and averting disaster.  However, if market liquidity doesn’t return, real estate values would fall even further, banks balance sheet would deteriorate, borrowers would fail to be able to refinance and banks would de-lever.  This would cause forced loan extensions as well as loan defaults, which would wipe out equity positions, and force distressed sales. So what’s the solution to providing liquidity to the market? Read the rest of this entry »

We’ve all heard the tired cliche about real estate: Location Location Location.  And while it does still hold true, perhaps now more than ever in regards to asset value, there is an interesting trend regarding the financing of those spectacularly located assets.  The desire of owners big and small is to refinance current debt with local or regional institutions.  Even if it means going from a non-recourse CMBS loan to a full recourse one.  Why? Let’s take a look. Read the rest of this entry »

Earlier this week, there was an article in the Washington Post outlining how GE outsmarted the system, because their failure would pose a “systemic risk” to the market if allowed to fail. “This was crisis management on steroids,” said a person familiar with the process. “A lot was made up on the fly.”

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