By: Scott Lynn
The recovery of the commercial real estate capital markets has gone full cycle since the depths of the Great Recession in 2008. Capital providers are back to considering an ever-widening variety of property types and transaction structures. The market is being driven by an abundance of favorably priced fixed or floating debt alternatives for income properties. 2014 was the third straight year of record high new CMBS and REIT Bond issuance. Institutions and Private Equity Investors are flush with cash. The capital markets are liquid.
Lenders and Capital Providers pushing for extra yield/return are committing to construction and development deals. Almost 60% of our 2014 production volume involved projects with a ground-up construction or redevelopment component. Capital Providers from all corners of the globe and the game have returned to the market, including local, regional, national and international banks that have expanded their views of what they will consider while remaining prudent with respect to leverage. Likewise, equity investors are considering development deals once again as prices for “Value Add” opportunities have accelerated given the abundance of liquidity.
The interest rate environment has remained stable, allowing borrowers to continue to lock up long-term debt. Borrowers and investors have plenty of options when considering long-term financing with CMBS, Life Companies, Banks and Credit Unions, leading the charge on the most aggressive programs from a leverage or cost-of-capital standpoint.
During 2014 Metropolitan Capital Advisors arranged approximately $550,000,000 of new debt and equity transactions. MCA completed 85 assignments during the past year that were placed with 33 different capital providers. Over $300mm of this transaction volume was funded for development deals, including urban mixed-use, suburban apartments, senior living, medical, retail and single family lots. Geographic dispersion of our completed transactions was as widely diversified as the product type, with almost 50% of our business closed outside of Texas for the first time in our history.
Our firm continued to grow during 2014 with the addition of Duke Dennis and Joshua Siegel as analysts in our Dallas office. MCA’s Denver office completed a successful inaugural year led by Charley Babb. MCA is a member of the Real Estate Capital Alliance (“RECA”), an association of seventeen real estate finance firms across the U.S. that expands our access to capital and increases our ability to execute assignments nationwide.
Metropolitan Capital Advisors is a financial intermediary focused on the exclusive representation of developers, investors and property owners in the commercial real estate capital markets. Our unique approach to client representation is easily apparent by our continuous ability to execute assignments over our 23-year operating history.
For further information on how Metropolitan Capital Advisors can help you to finance your next project or acquisition, contact any one of our Senior Directors at www.metcapital.com.