March 11, 2010

Debt - Back in Action in the Midwest

The below is the latest update from CBRE's Debt & Equity team that covers Michigan, Ohio, and Indiana. The important points seem to be 1) financing is available, and 2) though slightly higher rates than borrowers might like, its non-recourse.

Permanent Financing for Stabilized Assets
We continue to see signs of life in the credit markets. Banks largely remain on the sidelines, with the exception of community banks and credit unions. Life companies continue to cherry pick financing trophy assets in trophy markets with trophy sponsors. However, portfolio and balance sheet lenders are offering an alternative way to finance stabilized properties on a non-recourse basis.


I wanted to spotlight a loan program that will finance deals in the Midwest:

• $5 - $50 million
• 3-5 year term, may go longer in select cases
• Up to 75% LTV on “as is” value
• Acquisition or refinancing
• Stabilized multi-family, retail, office and industrial properties
• 7.0% - 8.5%
• Amortization up to 30 years
• Non-recourse
• 1.00% origination fee to lender
• Escrows for taxes, insurance, replacement reserves, tenant improvements/leasing commissions and immediate repairs

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