Public Private Partnerships…What are They Good For?

By Duke Dennis Over its 25-year operating history, Metropolitan Capital Advisors (MCA) has worked on numerous Public Private Partnership (PPP) transaction financings. PPPs have increasingly Read more

The Power of RECA (Real Estate Capital Alliance)

By: Scott Lynn and Andrew Hanzl Metropolitan Capital Advisors (“MCA”) is a member of the Real Estate Capital Alliance ("RECA"), a professional association of 18 Read more

Getting Creative: HUD 221 (D) (4)

By: Andrew Hanzl Take notice! The landscape is shifting: In anticipation of a market slow-down, commercial real estate lenders are dialing back their leverage and Read more

Private Lenders: Filling the Void

by Roger Wyche There will be approximately $96 billion of CMBS loan expirations during 2017. CMBS lenders, therefore, have been counting on refinancing  Borrowers to Read more

A Bridge (Loan) to Everywhere

By Charley Babb Do you remember John McCain’s famous “Bridge to Nowhere” speech from 2005? As the Arizona Senator, and then later as the Republican Read more

Limited Service Hotels are, well…limited!

By Todd McNeill In recent times, the Limited Service Hotel sector’s reputation has steadily declined in the eyes of the finance industry. Once the darling Read more

TrumpCare and the Effect on Healthcare Commercial Real Estate Market

By Kevan McCormack Since Donald Trump has taken office as President of the United States, he has been very busy “making good” on his campaign Read more

What is the TRUMP Effect on Commercial Real Estate? 4 Key Points

— By Sunny Sajnani There is no doubt that Donald J. Trump in the White House is a game changer for the real estate industry. Read more

Whither CRE Construction Lending?

By: Justin Laub The mantra of commercial real estate developers around the country when speaking of the state of construction lending these days might be: Read more

The Good, the Bad, the Texas High-Speed Rail Line

By Duke Dennis Brady Redwine of Texas Central Partners (TCP) recently addressed a group of Texas A&M real estate professionals about the high-speed rail line Read more

UT Ranked #1 in Commercial Real Estate Yardage

-By Scott Lynn Every fall season, the University of Texas at Austin McCombs Real Estate Finance & Investment Center (REFIC) sponsors the National Real Estate Read more

2017: Not a Forecast (Just Some Thoughts to Ponder) for the CRE Market

By Brandon Wilhite Accurately forecasting the commercial real estate market’s performance is a nearly impossible task. There are far too many variables to assess and Read more

What is PACE Financing?

By Andrew Hanzl Global warming is now a widely accepted concern. As real estate professionals, what role can we play to ensure environmental sustainability? One Read more

Banks Reign in Leverage in Effort to Curb Apartment Construction

By Charley Babb My real estate career spans over three decades. Yet for the very first time, I have witnessed lenders exercise prudence and consequently Read more

Risk Retention in CMBS Starting to “Sink” in

By Todd McNeill The early signals of Risk Retention are reverberating through the commercial real estate capital markets.  Several conduit shops, including MC Five Mile Read more

Risk Retention, Risky Business?

By Scott Lynn Basel III, HVCRE…all these new lending regulations that mean lenders are loaning me less and charging me more. Good grief!!! And now, Read more

It’s Senior Living Not Senior Dying

By Kevan McCormack Everything in life and real estate evolves.  Static retail shopping centers evolved into vibrant entertainment venues where a family could spend an Read more

Metropolitan Capital Advisors Arranges $5,512,000 Acquisition Loan For A 9.77- Acre Lot In Frisco

Metropolitan Capital Advisors, Ltd. (“MCA”) has arranged a land acquisition loan for a 9.77-acre tract located in Frisco, Texas at the northeast corner of Read more

Metropolitan Capital Advisors Arranges A $4,700,000 Construction Loan For UC Health Emergency Room (Arvada)

Metropolitan Capital Advisors, Ltd. (“MCA”) has arranged a $4,700,000 construction loan for UC Health Emergency Room, located in Arvada, Colorado. The 0.69-acre site is Read more

Ground Leases-Friend or Foe?

On the surface, a ground lease seems like a simple concept: a landowner grants permission for a tenant to use their land in exchange Read more

What Do Baby Boomers and Millennials Have In Common & Why It's Important in Commercial Real Estate

By Charley Babb What do Baby Boomers and Millennials have in common? They both like to spend money. While they may spend their money on Read more

The Economic Benefits of Walkability

By: Brandon Wilhite Starting with the Federal-Aid Highway Act of 1956, the way cities were developed in the United States began changing. Although it was Read more

Brexit – Immediate Effect on Commercial Real Estate?

— By Sunny Sajnani In late June 2016, a historic referendum was voted on approving the British withdrawal from the European Union (EU).  The immediate Read more

Hotels: What Inning Are We In?

By: Justin Laub I recently returned from the Urban Land Institute’s national conference on hotels and resorts. The last time ULI held this event was Read more

Choppy CMBS Market Hoping For Resurgence

By Charley Babb CMBS issuance for the first quarter of 2016 was roughly half of the production for the same period in 2015. This has Read more

Capital Providers

A Bridge (Loan) to Everywhere

By Charley Babb

Do you remember John McCain’s famous “Bridge to Nowhere” speech from 2005? As the Arizona Senator, and then later as the Republican Presidential nominee (2008), McCain denounced a transportation bill with earmarks that included federal funds for an $80 million bridge to an island in Alaska with 50 inhabitants. Hence, the nickname a ‘Bridge to Nowhere’.

After returning from the 2017 Mortgage Bankers Association Commercial Real Estate Finance Conference “CREF/MBA”, I am here to tell you that there is in fact capital out there for just about every flavor of “value add” deal in the commercial lending world – a bridge loan to everywhere! There are several lenders offering loans for the acquisition and repositioning of commercial real estate assets of every class. The basic premise is to provide the debt capital to get an investor from point A (acquisition) to point B (stabilized and enhanced value): thus, the term “bridge loan”.

The lending space in the capital markets has become somewhat crowded and therefore competitive. We can now procure loans for most clients in all the main groups of asset type: multifamily, office, industrial, self-storage, retail and hospitality. Previously, size mattered; smaller deals were shunned, but today bridge debt is available for balances as small as $5 million. A broader scope of both asset quality and location is also able to attract this financing; deals no longer necessarily require a going-in debt service coverage which allows for financing either partially or completely vacant properties. However, the ability to demonstrate that the property’s performance will underwrite a reasonable takeout of the loan via refinance and/or sale of the asset is a key criterion that must be met.

Though each lender has specific metrics for underwriting and quoting a loan, one can generally expect the following range of terms:

  • Loan amounts between $3 to $100 million;
  • Loan-to-cost ratio between 65-85%;
  • Loan-to-stabilized-value of 60-75%;
  • Primary loan terms of 1 to 3 years;
  • Extension options up to a total loan term of 5 years (for a fee);
  • Floating interest rates of 30 day LIBOR + 475 to 700 basis points;
  • Interest only for the term of the loan;
  • Future funding opportunities for capital improvements and other accretive expenditures;
  • Lender origination fees of 0 to 2 points;
  • Lender exit fees of 0 to 2 points;
  • The prepayment flexibility will likely be subject to some level of minimum interest earned; and,
  • Non-recourse, with standard carve-out provisions.

We currently serve several clients by procuring loans of this nature for investment opportunities. Therefore, we know that now is a great time to capitalize on the liquidity in the bridge lending space of the debt markets.

bridge loan denver

Charley Babb is the Managing Principal of Metropolitan Capital Advisors Denver office and can be reached via email – cbabb@metcapital.com. We seek to assist our clients with their commercial real estate financing needs and welcome the prospect to evaluate your opportunities with you.

Posted on by admin in Capital Providers, Commercial Real Estate Finance, CRE Market, CREF Comments Off on A Bridge (Loan) to Everywhere

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 the due diligence information required to fund a deal. The Capital Provider’s mindset works exactly like an electrical current taking the path of least resistance.  Lenders and equity investors focus their attention on those transactions where the necessary underwriting information is forthcoming without hassles or constant reminders. In fact, closings happen faster, more efficiently and with fewer headaches when Sponsor/Borrowers are proactive to the point of almost being declared “clairvoyant.” Face it, if we really know our deal, we know what someone is going to ask about or needs to see before they are going to make a multimillion-dollar investment of any kind.

Invariably, every time the capital markets take a major step in reverse (as was the case since 2008), the natural reaction is to become better underwriters of risk. The due diligence checklists expand from 64 items to 93, as more third-party reports are required and the legal bills get bigger. We live in a world where indeed, “He Who Controls the Gold, Makes the Rules”…as it should be. We also live in a world where most Capital Providers today are either regulated more than ever, are making loans they plan to sell to others (i.e. securitize) or, are making investments on an ALL CASH/ALL EQUITY basis. Of course everybody is asking more and more and more questions…good grief!!!

CRE Sponsors often make the mistake of assuming their deal is “DONE” once they have an issued a Term Sheet or Loan Application. The simple fact is, they are holding a little more than a party invitation with a lively caption: Details to Follow. Moreover, these same Sponsors tend to take their foot off the gas when they should really be putting the pedal to the metal on their closing efforts.

closing capital providersAt Metropolitan Capital Advisors (MCA), our belief is the business of securing a financing source is bifurcated into two distinct phases:  Marketing & Placement of the transaction and then Processing & Closing the deal. Twenty-two years ago, we set up our firm on this premise and established a full time, in-house Closing Department that focuses strictly on taking a transaction from a “meeting of the minds” all the way through the approval process to an eventual funding. With over $9.4 billion funded and an assignment tally exceeding 1,100 closed transactions, we must have something right in our secret sauce. That “something” is getting and keeping the Capital Providers’ attention.

Our observations confirm there are split personalities in the CRE finance business: those of us who are great Hunters and of equal importance, and those who make great Skinners.  If you have seen the one-man comic play “Defending the Caveman,” you’ll relate to the reference. If you have not seen the play, do so…  it will improve your relationship with your significant other. One thing is certain: it is hard to find a human being that can interchange the two roles effectively.  The personality traits of a great Hunter (even the Sponsor himself!!!) often get in the way of the more understandably pragmatic and diligent Capital Provider. The professional Closer bridges this void in personality shortcomings.

What is a Closer? First, a Closer is NOT your title agent, your lawyer or your CFO.   Moreover, your Closer is not the Capital Provider’s Closer or their attorney.  While all of these folks are important pieces of the puzzle, they are either not equipped to handle a wide array of closing details, are paid by the hour and/or, they are inherently conflicted because they represent the Capital Provider, not the Sponsor/Borrower.

A Sponsor’s Closer is exactly that…the party retained to close the deal on behalf of the Sponsor/Borrower, and someone who has a background in a variety of CRE disciplines such as property management, casualty insurance, title, survey, valuation and property tax issues along with a general understanding of pertinent legal matters and required loan documentation. A Borrower’s Closer must also possess the know-how and people skills to coordinate a host of third-party service providers, such as appraisers, property inspectors, environmental engineers, construction consultants and general contractors.

Attention to detail is tantamount to success.  Focusing  on everything from making sure there is a ladder available to get on the roof, to confirming the appraiser has the RIGHT rent roll, to checking the estoppel letters against the lenders underwriting, all fall within the purvey of the Closer’s daily responsibilities.

MCA originally set up its own internal Closing Department as a way to increase the probability and certainty the transaction would close as well as decrease the timeframe to get the deal funded. Twenty something years later, our clients continue to show their appreciation for the time and money saved by using MCA in the form of repeat business.

Likewise, Capital Providers move MCA’s prospective deals to the top of their consideration stack as Lenders and Investors prefer to deal with intermediaries that know how to keep their attention once they get their attention. Most assuredly, it is important to be as good at the CLOSE as it is to be good at the QUOTE by keeping the providers attention throughout the transaction process.

Posted on by Scott Lynn in Capital Providers, Closing the Deal Comments Off on Commercial Real Estate Capital Providers….. Getting & Keeping Their Attention

Metropolitan Capital Advisors Closes $19,400,000 Construction Loan for a 324 Unit Multi-Family in OKC

DALLAS, June 25, 2012 — 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 the Liberty Pointe Apartments (the “Subject Property”), a to-be-built Class ‘A’, 324-unit multifamily property located in Oklahoma City, Oklahoma at the intersection of Southeast 74th Street and Air Depot on the north side of Interstate 240 (the “Tinker AFB / I-240 Corridor”). The Subject Property is targeted to provide high-quality residences for employees of the expanding defense and healthcare sectors in the immediate area.
liberty-pointe-apartmentsThe Subject Property will be developed by Liberty Pointe, LLC. The Principal of Liberty Pointe, LLC has extensive multifamily experience in the Oklahoma City market. The Subject Property will be an access-controlled gated community designed around an interior water feature providing an aquatic view from the clubhouse and surrounding residential buildings. The centrally located clubhouse will feature a community swimming pool and 24-hour fitness center. Garages will be conveniently located throughout the complex for residents who desire extra year-round protection for their vehicles. Liberty Pointe will be the only Class ‘A’ apartment community located in the Tinker AFB / I-240 Corridor.
MCA secured a $19,400,000 construction loan which was approximately 88% Loan to Cost. MCA Senior Directors, Todd McNeill & Sunny Sajnani were responsible for arranging the financing with a Dallas based bank.
Since 1992, Metropolitan Capital Advisors has closed in excess of $8.5 billion of debt and equity transactions. National Real Estate Investor Magazine recently ranked MCA #18 on its Annual “Best of the Best” Financial Intermediaries list for 2011.

If you are looking for funding on your next multi-family unit, feel free to contact us below by filling out the form.

Posted on by Scott Lynn in Capital Providers, Closing the Deal Comments Off on Metropolitan Capital Advisors Closes $19,400,000 Construction Loan for a 324 Unit Multi-Family in OKC