The document summarizes recent developments in the commercial real estate lending market. It notes that lending markets are starting to recover slowly, with some lenders like Wells Fargo and Principal Life becoming more competitive in the mid-6% range. It also highlights a $5 million permanent loan deal secured at a low-6% interest rate. In general, commercial banks are doing deals in the low-mid 6% range at 70-75% LTV, while life companies remain at 65% LTV and lower-7% rates for 10-year terms. Fannie Mae and Freddie Mac loans remain attractive at high-5% to low-6% rates. Credit tenant lease deals remain steady, with Walgreens in

1. COMMERCIAL REAL ESTATE
NEWSLETTER
COMMERCIAL MORTGAGE Commercial Mortgage Banking / Consulting September / October 2009
BANKING AND
CONSULTING BABY STEPS ON THE ROAD TO RECOVERY /
Neil C. Efron ANOTHER DEAL CLOSING SPOTLIGHT
The past 60 days has seen several positive signs that the MARKET RATE WATCH
Broward Office lending markets are coming back. But the progress is
O (954) 940-5313 agonizingly slow. The first sign was Principal Life coming10 year treasury 10-2-09: 3.16%; 1 month ago 3.37%, 6
F (954)-940-5205 back in the lending market and becoming more competitivemonths ago, 2.76; 1 year ago 3.70%
with their interest rate in the mid 6% range. Wels Fargo5 year treasury 10-2-09: 2.18%; 1 month ago 2.33%, 6
Palm Beach Office announced they are expanding their lending program tomonths ago, 1.73%; 1 year ago 2.77%
O (561)-966-0070 include loans of 75% for the highest quality deals and they1 month LIBOR 10-2-09: 0.25%; 1 month ago 0.25%, 6
F (561)-966-0260 became more competitive with their interest rates (minimummonths ago, 0.49%; 1 year ago 4.05%
deal size of $5MM). There are also a few commercial banks
M (561) 379-5807 that will be getting back into the real estate lending market
in 2010. These loans will be in the 70% to 75% range with 5Wall Street: Wells Fargo’s program has improved both in
Expert Mortgage year interest rates in the low 6% range. Some of the banks terms of interest rate and loan to value. They will go as high
Banking Solutions are even considering partial recourse versus full recourse. as 75% for the highest quality deals with rates around 6.5%
• Finding the right DEAL SPOTLIGHT for 5 years and upper 6% range for 10 years. Minimum deal
lender size is $5MM. Goldman is continuing their large loan
$5 MM Permanent Loan
• Getting the best
program for deals over $25MM. The LTV is 65% for a 5
deal
year fixed rate in the 8% range.
• Creative and
Despite the continued talk of revival, the securitized market
responsive lender
relationships
it is still at least a year away. The spreads on the securitized
• Expert Consulting pools have come down dramatically in the past 6 months but
still would require borrowers to accept interest rates in the
For Every Property 8% plus range for 5 and 10 year deals. And the loan
Type underwriting would require very conservative deals. The
• Multi-Family product is not competitive and will get very few takers.
• Office
• Industrial Life Companies: More signs of life coming from life
• Retail companies. They are trickling back slowly and becoming
• Seniors and ALFs more competitive when it comes to interest rate. Life
A long time customer was looking to refinance this Publixcompanies are now in the mid 6% range for 5 years and
• Single Tenant shadow anchored deal that had been purchased all cash. Welower 7% range for 10 years. But they remain stuck on a
investment grade
were able to get an excellent deal given the state of themaximum LTV of 65%. And of course the deals need to be
and non
lending environment. This commercial bank deal was a 5plain vanilla.
The Right Lender
year fixed rate loan with an interest rate in the low 6%
• Commercial range. The LTV was 75% and was full recourse. TheCommercial Banks: There are banks doing deals today but
Banks (recourse underwriting process was comprehensive. But that is themostly smaller community banks. Other banks are focusing
and non) new world today, detailed lender analysis on the subject andon their existing portfolio and their existing customers.
• Life Companies on the borrower’s entire portfolio. Loans can get done at 70% LTV or even 75% LTV at 5 year
• Fannie Mae or fixed rates in the low to mid 6% range. Borrower financial
APARTMENTS LOANS REMAIN THE BEST strength and track record are critical to any deal. These loans
Freddie Mac or
HUD DEAL are all full personal recourse. There will be more banks
• Credit Companies Fannie Mae and Freddie Mac: Interest rates for thesegetting into the lending business in early 2010.
• Credit Unions agency loans continue to be extremely attractive in the high
5% to low 6% range for 10 year deals. Florida remains on Credit Tenant Lease (CTL) Lenders: Pricing remains
the pre-review list (maximum 65% loan to value). Thesesteady for investment grade single tenant deals. Walgreen’s
Opinions expressed are the non-recourse loans allow additional loan dollars as the cash deals are in the higher 6% range. Government deals in the
author’s own and may not
represent those of BankAtlantic flow increases. lower 6% range. GE Real Estate is back in the market
looking at non-rated single tenant deals. Their rates are
Credit Unions: These loans are primarily available outsidehigher (8% range) but they will do higher amortization and
of Florida. Loans up to 75% with value added deals a will rate the credit themselves, The tenants needs to have
possibility. 5 and 10 year deals are available in the 6%revenue of $20MM plus.
range. The fee is 1 to 1.5 points to the lender.