The Local Bank vs. CMBS Boxing Match, Special Texas Edition

By Justin Laub             On one side of the ring we have your Local Banker from Texas. He’s wearing a polo shirt from the country club Read more

Metropolitan Capital Advisors Closes $5,560,000 Construction Loan For Speculative Industrial Project In Oklahoma City, OK

Dallas, Texas-based Metropolitan Capital Advisors (MCA), a financial intermediary specializing in the exclusive representation of investors, developers, and property owners in the commercial real Read more

Thank the FDIC, OCC, and FINRA for Residential Increases Bringing CRE With it!

by Todd McNeill The rebound in home prices in the Dallas / Ft. Worth residential market has been record-setting during the last three years.  I Read more

MCA Closes Two Single-Tenant Government Office Loans Totaling $19,900,000 in Oklahoma

Metropolitan Capital Advisors, Ltd. (MCA) has closed long-term debt financing for two separate office buildings leased to government service tenants. Lincoln Plaza, a 154,085 SF Read more

The CMBS Market is on FIRE!

By Sunny Sajnani, Senior Director The CMBS credit market is vital for the commercial real estate industry, providing leverage on assets that typically banks or Read more

Basel III: What Is This, and Why Do I Care?

By Kevan McCormack So maybe you have heard about this thing called Basel III, and maybe you haven’t.  For those of you wondering what Basel Read more

GSA Leases – Lucrative but Risky?

By Sunny Sajnani, Senior Director The General Services Administration (GSA) is probably the largest tenant in the United States, providing space for more than 400 Read more

The Main Drivers of the Single Tenant "Build-to-Suit" (BTS) Fever.....

by Gabe Gonzalez The single tenant Build-to-Suit (BTS) market continues to be one of fastest growing sectors in terms of development, acquisition, and financing activity.  Read more

Development Cycle Already?

by Hook Harmeling It does not seem that we have been out of the Great Recession for all that long. If you blinked, you probably Read more

Preferred Equity – What the Heck Is It?

by Charley Babb We were recently engaged by clients to help monetize some of their trapped equity in an appreciating asset on which they had Read more

Credit Tenant Lease (“CTL”) Financing

By Brandon Wilhite At Metropolitan Capital Advisors (“MCA”), our clients’ financing requirements range from conservative low-leverage to more aggressive high-leverage and everything in between.  Due Read more

Seeing into the Future of Commercial Real Estate Interest Rates

By: Justin Laub                 You’ve come to the right place, folks. I’m going to give you exactly what you’ve been asking for. I’m going to Read more

REIT’s Are Upgrading and Entrepreneurs Are Reaping the Benefits

by Todd McNeill In the last 24 months the REIT’s have been busy adjusting their portfolios.  During the depths of the recession, REIT’s had access Read more

Variety (in Commercial Real Estate) is the Spice of Life

by Scott Lynn Four years ago, at the height of the Great Recession, a commercial real estate financier would have been hard-pressed to find a Read more

Using a Tax Equity Partnership Structure in Real Estate Development

A powerful tool for real estate developers is tax optimization. However, without a proper understanding of tax incentives, these benefits may not be utilized Read more

The Nuances of Underwriting Retail Real Estate

By Brandon Wilhite Every commercial property type has its own unique set of underwriting and investment criteria. While some of those criteria are common to Read more

Hospitality Financing in 2014

by Charley Babb The cold, harsh winter weather that has covered the country has finally begun to subside, and the hope of spring is on Read more

Senior Housing: Don’t Stop Till You Get Enough

By Kevan McCormack The Senior Housing Industry has been on a tear the last several years and shows no signs of slowing down.  The senior Read more

Chasing the Texas Oil Patch

By Brandon Miller Exploration and drilling are in full swing these days in the oil fields of the Permian Basin of West Texas and the Read more

Non-Recourse Construction Loans

By: Justin Laub “What’s the difference between Santa Claus and a non-recourse construction loan?” The answer: the non-recourse construction loan actually exists. That certainly wasn’t Read more

Office Construction Has Come Back Full Swing

By Gabe Gonzalez 2014 has started off with a bang.  We came back from the annual Mortgage Bankers Association Convention with a myriad of new Read more

Art of the Cash-Out Refinance

--By Sunny Sajnani, Senior Director In today’s credit environment, most borrowers are taking advantage of attractive interest rates... which remain very close to the all-time Read more

Commercial Real Estate Capital Providers….. Getting & Keeping Their Attention

By Scott Lynn Capital Providers, whether on the debt or equity side of the transaction, inherently have short attention spans...especially when it comes to receiving Read more

Equity Friendly Market in 2014

By Hook Harmeling It has been a long road back from the lows of 2009 in the Real Estate Equity Markets. We have gone from Read more

The Fed’s QE Exit – A Few Thoughts to Consider

By Todd McNeill The Federal Reserve’s announcement that it would begin curtailing its bond-buying stimulus program received a positive reception from the capital markets, but Read more

The Local Bank vs. CMBS Boxing Match, Special Texas Edition

By Justin Laub

            shutterstock_140946424On one side of the ring we have your Local Banker from Texas. He’s wearing a polo shirt from the country club to which you both belong and is sporting a freshly pressed pair of slacks. He’s waving to you from the ring and wants to know if you enjoyed the fishing trip with your son, Scooter. He’d love to refinance your shopping center down the street and also wants to take you out for a round of golf this weekend. On the other side of the ring we have your Wall Street CMBS Lender. He’s in a pinstripe suit, anxiously glancing at his watch every two seconds. You notice the bright gleam coming off the brass knuckles that are peeking out of his back pocket. He doesn’t notice you because he’s been on the phone for the past ten minutes on a heated closing call. He’ll give you a loan. You know the terms, so just let him know if you want the loan. Then suddenly the bell rings. The fight to do your loan is on!

As with other major markets in the US – NY, California, Chicagoland, etc. – the bank lending market in Texas is extremely competitive. Local banks in Texas are often able to offer terms (leverage, amortization, non-recourse, etc.) on middle-market real estate loans that are reserved for only the highest quality assets (and borrowers) in smaller, nearby markets such as Arkansas, New Mexico, Oklahoma, Louisiana, Kansas, etc. For that reason, local bank loans in Texas offer a compelling mix of aggressive terms and personal interaction that is hard to beat for certain types of commercial real estate loans. That makes the Local Banker in the ring not just a nice guy who knows your kids but someone who can get aggressive on his loan terms.

The Wall Street CMBS Lender is working with a different bag of tricks. The CMBS market is a high-octane lending machine. When it is running at full throttle, as it is now, it can offer up terms on certain deals that no local bank lender can touch. The trick is knowing what type of deal fits the CMBS box. Once you fit that box, you are going to get terms – such as non-recourse, high-leverage, 10-year fixed-rate debt, cash-outs, 30-year amortization, etc. – that aren’t available with local bank lenders on most deals. For these deals, you are going to want to put your money on the Wall Street CMBS Lender with the brass knuckles in his back pocket. You won’t even care about the fact that he won’t remember your name in a year and that the servicer on the loan isn’t interested in how Scooter is doing.

Choosing between local banks vs. CMBS and helping advise our clients on which deals fit which lenders is an everyday part of our business at Metropolitan Capital. Whether you are looking to refinance your property or to acquire a new one, we can advise you on the best type of lender to use and the optimal capital structure to do so. We have been actively helping clients get aggressive, fully non-recourse loans from local banks when our clients didn’t think it was possible and sourcing cash-out CMBS loans for clients who didn’t know it was available. Give any of our Senior Directors a call to discuss your lending goals. We’d be glad to help advise on the local bank vs. CMBS debate as it applies to your deal.

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Metropolitan Capital Advisors Closes $5,560,000 Construction Loan For Speculative Industrial Project In Oklahoma City, OK

Dallas, Texas-based Metropolitan Capital Advisors (MCA), a financial intermediary specializing in the exclusive representation of investors, developers, and property owners in the commercial real estate capital markets, has arranged a construction loan for a to-be-built industrial building located at the northeast corner of Interstate 35 and East Hefner Road Oklahoma City, Oklahoma.  The 125,000 s.f. project known as Northgate 125 will consist of 117,500 s.f. of warehouse space, 7,500 s.f. of office space, ten (10) truck docks, and twenty-one (21) parking spaces.

shutterstock_124476118Northgate 125 is located within the Northgate Industrial Campus. The campus consists of four (4) existing buildings with a total of 602,379 s.f. that are 100% occupied. The project is being developed by Gardner Tanenbaum, who currently owns another 280,000 s.f. industrial building within one mile that is also 100% occupied. The Northeast Oklahoma City submarket currently has a 1.9% vacancy rate.

The $5,560,000 loan carried an interest rate of 3.75% with a total term of five years along with a twenty-five-year amortization once the property achieves 70% occupancy.

MCA Senior Directors Todd McNeill and Sunny Sajnani were responsible for arranging the construction loan on behalf of a partnership controlled by the project developer.

Since 1992 Metropolitan Capital Advisors has closed in excess of $9.3 billion of debt and equity transactions. National Real Estate Investor Magazine has consistently ranked MCA as one of the top CRE Financial Intermediaries in the US.  MCA has already closed over $300 million of commercial real estate financing during 2014.

 

 

 

 

 

 

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Thank the FDIC, OCC, and FINRA for Residential Increases Bringing CRE With it!

by Todd McNeill

The rebound in home prices in the Dallas / Ft. Worth residential market has been record-setting during the last three years.  I know this first hand as I was a beneficiary.  I recently sold my residence in Plano to move closer to my office and was shocked at the state of the sale market for residential homes.  The house was listed on a Thursday afternoon.  By Saturday we had in excess of thirty showings and seven contract offers, all of which were at least $10,000 above the listed asking price!  All of the contracts came with pre-approval letters from various mortgage companies.  The exercise between picking the winning contract was simply a matter of who had the most earnest money with the largest down payment.

shutterstock_127556831Why has the North Texas / DFW residential market recovered so quickly? Most assuredly, the DFW economy did not dip as low as the rest of the country during the “Great Recession.”  There was still significant activity in these markets during the downturn.  The only thing missing was the banks’ willingness to lend to developers to build product, whether it was single family, multi-family, shopping center, office, etc.  I am not suggesting that DFW needed development of the scope prior to 2008, but there was continued demand throughout the recession for most all product types depending on the submarket.  This dynamic created significant pent-up demand for all things related to real estate.

The lack of funding for this pent-up demand created a “jolt” in the price of real estate across the board from residential to commercial.  This is simply the most basic form of economics, supply and demand.  Texas has created 33% of the entire country’s new jobs since 2004. That is a staggering amount of people moving into this region.  Meanwhile, DFW multifamily and office occupancy rates continue to climb to very healthy levels.  Over 20,000 new apartment units are under construction in Dallas.  People are having trouble finding places to live, shop, and have as offices.

The good news is that we have all real estate product types firing on all cylinders!  The office, retail, multi-family, and industrial markets are all filling up fast, and rents are rising quickly.  In DFW, the residential market has a scarce three-month supply of homes, with a normal market equilibrium being six months, which is continuing to drive home prices upward.  The bad news is that Texas is now moving into a ‘moderately’-priced place to live whereas before the crash it was considered an affordable place to live.  If we can’t get residential development off the ground fast enough, we risk more price increases on houses and on losing the advantage of affordability as a selling point when companies are looking to move into the region.  Toyota, for example, factored that aspect into their move from California to Plano, and even with today’s price increases on houses here in DFW, it is still significantly more affordable than where they were in California.

So, you can thank the FDIC, OCC, and FINRA for our recent run-up in real estate values since they told our local banks to stop funding and get the commercial real estate loans off their books as fast as possible during the recession.  In their infinite wisdom, they painted our market with a broad brush rather than looking at the local economics, leaving us with the perfect situation where demand is far outstripping supply and prices are increasing month over month.  I am glad I sold my house last month!

So, what does a residential housing price have to do with commercial real estate capital markets?  Well, everything, as a matter of fact.  Remember when housing prices went over the cliff in 2007, the rest of the world went with it!  When prices are stable and/or accelerating, lenders can underwrite fund loans and create liquidity.  That’s a good day for everyone.  The residential recovery is leading the commercial markets into the next development cycle and bringing with it an abundance of new capital providers.

 

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