Archive for the 'Education' Category

Real Estate Capital Basics – Underwriting Fixed-Rate Permanent Loans

Yazan: RECI | 01 March 1991 | No Comments
Categories: Education

Key underwriting variables reviewed including values, pricing, term, debt coverage and amortization. The variable discussions based on an update of “The Guide to Real Estate Capital Markets” originally published in 1983 and 1989.

Real Estate Capital Basics – Underwriting Equities

Yazan: RECI | 01 February 1991 | No Comments
Categories: Education

A fundamental guide to sizing real estate equities for income properties. Based on updated criteria per the “The Guide to Real Estate Capital Markets” published in 1983 and 1989.

Real Estate Capital Basics – Construction Loans

Yazan: RECI | 01 December 1990 | No Comments
Categories: Education

An broad overview of construction lending options based on updated information from “The Guide to Real Estate Capital Markets” originally published in 1983 and 1989.

Real Estate Capital Basics – Land Sale Leasebacks

Yazan: RECI | 01 November 1990 | No Comments
Categories: Education

When non-depreciable assets may be contributed to a venture, a less known hybrid funding format may be practical –the Land Sale/Leaseback.  Unlike joint ventures and participating/convertible mortgages, land (whether subordinated or not) becomes the pillar of forming other debt and equity terms.
The land sale-leaseback is a hybrid structure funded as a multi-tiered real estate transaction [...]

Real Estate Capital Basics – Participating Loans

Yazan: RECI | 01 October 1990 | No Comments
Categories: Education

Participating and Convertible Mortgages are popular funding ventures among lenders and developers for raising funds based on sharing upside.  Each of these structures are discussed as follows:
Participating Mortgages
Structured as pure debt, participating mortgages provide added profits to the funding sources in the form of participation over and above the first mortgage base rate.  Often called [...]

Real Estate Basics – Joint Ventures

Yazan: RECI | 01 September 1990 | No Comments
Categories: Education

The most popular method of raising equity beyond a simple partnership is a joint venture.  The joint venture assumes many formats of equity ownership including participating debt, unleveraged equity and highly sophisticated partnerships delving beyond simple profit participations and risk distributions.  Joint ventures normally include developers and investment funds — a blend of real estate [...]

Real Estate Capital Basics – Subordinate Loans

Yazan: RECI | 01 June 1990 | No Comments
Categories: Education

Subordinate loans reviewed as applied to income-property capital markets. The review features an update of “The Guide to Real Estate Capital Markets” originally published in 1983 and 1989.

Real Estate Capital Basics – Interim Loans

Yazan: RECI | 01 May 1990 | No Comments
Categories: Education

A rudimentary review of income-property capital markets based on interim debt. The review is taken from an update of “The Guide to Real Estate Capital Markets” originally published in 1983 and 1989.

Real Estate Capital Basics – Floating-Rate Permanent Loans

Yazan: RECI | 01 April 1990 | No Comments
Categories: Education

A elementary introduction to income-property capital markets, focusing on floating-rate permanent loans. The summary is based upon updated information from “The Guide to Real Estate Capital Markets” originally published in 1983 and 1989.

Real Estate Capital Basics – Fixed-Rate Permanent Loans

Yazan: RECI | 01 March 1990 | No Comments
Categories: Education

An elementary discussion of income-property, fixed-rate permanent debt. This updated discussion is taken from the “Guide to Real Estate Capital Markets” originally published in 1983 and 1989.

Real Estate Capital Basics – Equities

Yazan: RECI | 01 February 1990 | No Comments
Categories: Education

A basic introduction to income-property capital markets with a focus on real estate equities. The summary is based upon an update of the “Guide to Real Estate Capital Markets” originally published in 1983 and 1989.

MORTGAGE RATES

« "Current permanent loan rates for income-properties start at 5.5%. Dial 773-CAPITAL (227-4825) for the Real Estate Capital Rateline for daily update." »

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Las Vegas, NV - February 6, 2010 - According to industry leaders gathering in Las Vegas this week, debt capital is readily available for 2010.  Optimism is in the air and the mortgage lenders are starting to offer more generous terms and conditions.  In summary, timing is excellent for select borrowers in securing debt based on the following conditions:  (1) Recovering economy, (2) Ample supply of capital and (3) Limited supply of financeable real estate assets.  The following highlights summarize the 2010 state of the realty capital markets including an overall outlook and overall funding program offerings:  Back to Basics:  As lenders workout of their legacy problems, new funding goals surface which are clearly more ambitious than 2009. Still underwriting of actual numbers w/o projections, yet inflation fears exist. Most lenders are Indifferent to spreads, but not competition. Valuing real estate properties in a declining market still a challenge. More allocation of funds available above target amounts if deal flow is of sufficient quality Underwriting Dynamics:  As has been the case last year, high-quality projects in major markets backed by excellent sponsorship and cash flow characteristics are most desired—especially based on low leverage of 65% of value.  Location/Property Types: Major MSAs strongly preferred for optional pricing and leverage.  Otherwise a substantially most costly financing with lower leverage. Preferred property types ranked in order:  (1) Multifamily, (2) Credit-Tenant lease of all property types, (3) Industrial, (4) Retail, (5) Office - however medical office ranks equal to Industrial and (5) Lodging. Pricing (Permanent Fixed-Rate Loan): Agency pricing for apartments starts in the low to mid-5% range for 5 year or greater term. Life company pricing starts mid-5% to 6% for 5 years or more term mostly targeted for commercial property pricing (agencies are more competitively priced) More entrepreneurial funds start at 7% or more targeting secondary markets, smaller fundings, older properties and lodging assets. Add a pricing premium of 25 to 50 basis points for loans below $5 million. Yield differential disappearing - typical ($5 to $50 million) vs. larger loans. Forward funds available up to a year based on 6 o 8 basis points premium per month.  Leverage: Above 65% LTV on a select basis combined with lower spreads. Values based on the lower of: (a) purchase price, (b) appraised value or (c) lender imposed capitalization rate.