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

Commercial Real Estate Finance

Local & Regional Banks Step Up Appetite for CRE Loans

-Post by Scott Lynn

Two years ago, local and regional banks were not returning our phone calls about new commercial real estate loan (CRE) opportunities. Our friends in the banking community gave us a standard response: too busy dealing with loan defaults, foreclosures, falling property values, or keeping regulators placated by not making new CRE loans.

cre-loansWhat a difference two years makes! It really does feel like spring is in the air again! During the month of March alone, Metropolitan Capital Advisors (“MCA”) completed over $10,000,000 of loan placements with banks that offered very attractive terms to our clients.

Examples of our March bank placements include a $3,450,000 five-year floating rate secured by a fully-leased 18,000 sq. foot shopping center near Ft. Hood military base in Texas. MCA represented a privately-held opportunistic investment fund that had purchased an existing note, foreclosed on the asset, and stabilized the property. The refinance proceeds allowed our client to repatriate their equity investment and pursue new acquisition opportunities. This loan was closed in 36 days start-to-finish.

Other interesting bank placements included a loan on an apartment complex in Houston (purchased two years ago) that is now fully renovated and stabilized.  A regional bank stepped to the table with a $4,250,000 term loan to pay off a high rate/high leverage acquisition loan.  The borrower’s interest rate cost was cut in half — from 12% to 6%. Now the borrower/client is enjoying significant after-debt-service cash flow while they market the property for sale.

Sometimes banks are as competitive as life insurance companies and CMBS/securitized lenders when it comes to offering an attractive fixed rate loan. Included in our March Madness loan closing tally was a $1,700,000 loan secured by a portfolio of light industrial & warehouse properties located in Ft. Worth, where our client locked in a five-year interest rate at 5.85%.

While banks are typically the “go to” source for constructions loans, the ground-up development arena has not exactly been a growth industry when the economy was in a healing mode. Banks need to generate loans to make a profit — so with underwriting and quoting existing cash flow, CRE can easily turn out to be a win/win situation for both the lender and the borrower.

Here is a top ten list on why you might want to consider a bank for your next CRE loan:

1)      Banks can be flexible on structure and will sometimes accept other collateral to get to the desired loan proceeds.

2)      Banks usually do not charge prepayment penalties… a perfect way to park a deal until you sell it.

3)      Bank floating rate pricing is well below the fixed rate pricing offered by other conventional sources.

4)      Banks may also have very competitive fixed rate programs as noted above.

5)      Banks are always the preferred source when construction or renovation is involved.

6)      Banks can agree to “partial release” provisions if you have a “For Sale” deal, such as a condo or land development.

7)      Banks can usually move fast — MCA just closed a deal in 36 days

8)      Banks are relationship-oriented and welcome multiple transactions.

9)      Banks are back in the market, so there is a variety to choose from for most transactions.

10)  Banks with a wide operational footprint can be the best option for out-of-state and foreign borrowers.

The downside (if any) is banks usually require full or partial recourse from borrowers with good credit, minimal legacy, and with strong sponsor credentials. Non-recourse (no personal liability) loans are the exception in the banking world, and are usually only discussed when a transaction is low leverage, low loan-to-value, and has a high debt service coverage.  Banks may also be better disposed to a non-recourse transaction if the income stream is supported by a strong credit tenant.

Knowing what banks to go to, which banks will lend on specific property types, minimum and maximum loan amounts, and other critical lending parameters requires a wide knowledge base to navigate the evolving market.  Since 1992, MCA has historically used the bank community on over 57% of its debt placements — that’s almost $4.8 billion of closed bank loans.  MCA has the deal flow, market knowledge, and established relationships to guide your prospective transaction to the best possible outcome with a wide variety of local, regional, national, and international banks.

Posted on by Scott Lynn in Commercial Real Estate Finance Comments Off on Local & Regional Banks Step Up Appetite for CRE Loans

Metropolitan Capital Advisors Closes a $19.5 Million Permanent Financing Package

Dallas-Based Commercial Real Estate Finance Intermediary Completes Deal for a 25 Property Retail Portfolio

mcaLogo1DALLAS, March 12, 2012 — Dallas-based Metropolitan Capital Advisors (MCA), a real estate financial intermediary specializing in the exclusive representation of investors, developers and property owners in the commercial real estate capital markets, has successfully secured a permanent financing package with a CMBS lender for the refinance of the Sunwest portfolio—a collection of twenty-five (25) single and multi-tenant properties scattered across eight (8) states. Of the 25 properties, 20 are owned fee-simple while the rest are subject to ground leases.

The sponsor, Rainier Capital Management, a Dallas investment company that has owned the portfolio since 2004, had a maturing conduit note on a much larger pool of properties (60-plus assets across 15 states). MCA identified and carved out a select pool of assets to finance into a new permanent mortgage. Simultaneous to the refinance, the sponsor consummated nine (9) property sales to pay off the existing debt in full… ALL ON THE SAME DAY!

This creative financing/sale structure increased cash flow of the Sunwest portfolio by substantially reducing the interest rate on the new loan and carving out a large pool of properties free and clear of debt. The management company, Emersons Commercial Management (also based in Dallas) was instrumental in helping close the refinance and sales. Emersons has managed the Sunwest portfolio for over 20 years.

The $19.5 million permanent mortgage has a fixed interest rate for 10 years. MCA structured the financing on a 30-year amortization for the fee-simple properties while placing shorter amortization periods on the ground lease properties. The loans were cross-collateralized to ensure steady cash flow across the portfolio for the lender. MCA Senior Director Sunny Sajnani arranged the transaction.

ABOUT METROPOLITAN CAPITAL ADVISORS

Metropolitan Capital Advisors specializes in the exclusive representation of investors, developers and property owners in the real estate capital markets. Since 1992, Metropolitan Capital Advisors has closed in excess of $8 billion of debt and equity transactions on behalf of a multitude of commercial property owners, developers and investors. National Real Estate Investor ranked Metropolitan Capital Advisors No. 20 on its Annual Top Financial Intermediaries list.

Metropolitan Capital Advisors is staffed with a team of professionals who specialize in specific components of the “transaction process” (i.e. underwriting, marketing, processing and closing). All of Metropolitan Capital Advisors’ senior directors have an average of at least 15 years of professional experience. Metropolitan Capital Advisors’ staff has expertise and capabilities in a vast array of debt and equity services, including construction and permanent debt, structured finance, and portfolio transactions.

Posted on by Scott Lynn in Commercial Real Estate Finance Comments Off on Metropolitan Capital Advisors Closes a $19.5 Million Permanent Financing Package

2011 Retail Sales Good for Commercial Retail – Record Year but No Thanks to December

Post by Sunny Sajnani

 

commercial-retail-real-estateFor all of 2011, retail sales totaled $4.7 trillion (yes with a T)!  That was a record set for an annual total. Sales posted a gain of 8% over 2010 and a 20% surge from the bottom of the recession.  The numbers are very encouraging for retailers as these figures confirm the economy is strengthening.  And when retailers are happy… commercial retail developers (and commercial real estate finance professionals) are happy.

Not so fast, Mr. Let’s-Go-Build-A-Spec-Retail-Property!  December’s holiday season was not so merry.  In fact, it was the first drop in sales month-over-month since May 2010.  That’s right… 2011 was the first year EVER, November figures were higher than December’s.  Sales decreased by 0.2% compared to last year’s increase of 6.4%. Although December posted $400 billion in sales, why was there a decline from November?

The MAJOR factor that drove the decline was people spent like crazy in November as retailers were forced into heavy discounting to attract shoppers.  Consumers raised their borrowings in November by the most in a decade (must have been something in the turkey stuffing)!!  When Mr. & Mrs. Doe were hit with a huge credit card bill in December, they decided to go cheap on Christmas gifts.  Retailers responded with massive sales.

So what does this mean for real estate professionals? It means that the economy is still trying to figure itself out.  Continued job growth is necessary to boost consumer confidence.  Most likely, there was seasonality adjustment of job growth and employees were unsure of their positions toward the end of the year—hence the decline in spending.

Metropolitan Capital Advisors’ outlook on retail: Not too much new development in 2012 until retailers can predict spending habits and profit margins improve (less Red Apple Days).  New leasing velocity (especially with anchor and large tenants) will be flat. Today, retailers and tenant reps are concentrating on household incomes more than number of households when selecting new locations. This flight to quality (rather than lower rental rates) is pushing new “deals” to infill locations similar to the new high demographic “By Choice” apartment renters.  Retailers are also downsizing with new innovative concepts.  Big box retail development is not quite what it used to be.

Despite the slower-than-preferred recovery of the commercial retail property sector, long-term fixed rate debt is now readily available for stabilized properties.  If a fortuitous acquisition is in your gun sights, there are bridge loans, mezzanine debt and equity joint venture money available where pricing will correlate to the risk involved.  MCA recently completed several built-to-suit and owner-occupied construction loans.  Our firm has also received proposals from both debt and equity providers who were ready to step up on new retail development transactions, HOWEVER, promised leases are still out for signature. Sound familiar? We might all have to hold our breath until 2013 for significant multi-tenant preleasing to materialize to justify new construction.  Stay tuned!!!

Posted on by Scott Lynn in Commercial Real Estate Finance Comments Off on 2011 Retail Sales Good for Commercial Retail – Record Year but No Thanks to December