Commercial Real Estate News Wrap Up From Liberty SBF: July 06, 2016

July 7, 2016

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Commercial mortgage brokers should make sure they understand the distinction between distressed properties and a distressed neighborhood in order to select the right lender for the transaction. Ted Kapnek, President of APEX Mortgage Corp, writes in the Scotsman Guide that distressed properties are neglected buildings, while distressed neighborhoods are typically the result of economic factors beyond a single owner’s control. As a commercial mortgage broker, Kapnek suggests that you should understand the motivation of lenders to do business within the more challenging areas they serve and take advantage of this opportunity for future projects.

U.S. office tenants have resumed expanding into office space, according to a report by JLL. Julia Georgules, Vice President and Associate Director of US Office Research, writes in GlobeSt.Com that she “fully [anticipates] a return to strong leasing activity” even as rents in many markets approach peak pricing. The numbers back her up–almost 50% of new leases for 20,000 square feet or more were expansions, and 56% of the second quarter’s larger tech leases were also considered expansions. Developers are on track to respond to this new upwards trend, with over 100 million square feet in the total national pipeline for office space and just under 50% of this space already pre-leased.

Bridge loans are a great way to jump-start troubled properties while preserving equity, as highlighted in a recent article in the Scotsman Guide. Jeffery Wolfer, President and CEO of Silver Arch Capital Partners, writes that bridge loans are a great way to fill the gap between conventional lenders and distressed properties, especially with a higher loan-to-value ratio and a quicker turnaround than other types of loans. Furthermore, bridge lenders are often able to assist borrowers with out-of-the-ordinary loans, taking into account future cash flows, value-add potential, and demographics of the area. Within underserved markets, bridge loans can especially serve as a valuable option in comparison to traditional loans.

8+1 (That’s 9) Things You Need To Know

  1. 10 issues that could impact CRE in the upcoming year
  2. Putting a price on green- the value of energy efficiency
  3. The coming Uber revolution and REITS
  4. NYC’s Waldorf Astoria set to close in ’17 for condo rebuild
  5. US apartments shrink to smallest size in a decade
  6. The impact of human-induced earthquakes on CRE
  7. Why you should make your lender your partner
  8. REITS are pension funds’ top-performing asset
  9. What it takes to achieve a zero net energy building