http://www.commercialloandirect.com/blog/ Commercial Loans, Apartment Mortgages & Commercial Financing - News regarding the Commercial Lending arena. en-us Nucleus CMS v3.41 � Weblog http://backend.userland.com/rss http://www.commercialloandirect.com/blog//nucleus/nucleus2.gif http://www.commercialloandirect.com/blog/ http://www.commercialloandirect.com/blog/index.php?itemid=128 Commercial Loans & Conduit Loans

Commercial Loans - Interest Rates

Conduit Loans]]> General http://www.commercialloandirect.com/blog/index.php?itemid=128 Tue, 13 Dec 2011 16:09:57 -0500 http://www.commercialloandirect.com/blog/index.php?itemid=123
Our key theme in the second half of this year was one of moderate, subpar economic growth accompanied by modest inflation pressures, and no change in the Federal Funds target rate. As we transition into 2012, our growth outlook reflects more of the same for the year ahead. We
expect the economy to expand 2.0 percent for the year ahead, with small gains from many sectors of the economy as opposed to a major contribution from any one segment.

We build our outlook upon the idea that consumer spending will continue to add to economic growth. However, the slow pace of job gains, marginal improvement in personal income and modest inflation pressures in the first half of the year will keep consumer spending in check. We
expect approximately 1.5 million jobs to be added over next year, for an average of 123,000 jobs per month. The pace of job growth will be disappointing as structural challenges in the labor market persist. The disconnect between the skills among the American labor force and the skills in demand by firms remains the biggest challenge to stability in the labor market.

The sluggish pace of job gains should result in only a marginal improvement in personal income. Inflation is likely to remain somewhat elevated in the first half of the year at 2.3 percent but should moderate in the second half of 2012. The inflation environment in light of only marginal personal income gains will restrain personal consumption to 1.5 percent in the first half of the year before giving way to somewhat stronger growth in the second half of the year.

Reiterating our view of “more of the same” in 2012, business fixed investment will remain a strong support to growth over the next year. The main driver of business investment over the past year—investments in capital equipment—should remain strong, but will not reach the doubledigit gains observed in 2011. The composition of business fixed investment should shift toward structures as stability in the commercial real estate market begins to slowly return. Short-term interest rates should remain low for most of the year, while longer-term borrowing rates should begin to rise in the latter half of 2012. As promised, the Fed should remain on hold for the duration of year.

We expect the government sector to remain a drag on economic growth in the year ahead. State and local governments will continue the process of aligning spending with the slower pace of revenue growth. Local governments will likely continue to aggressively reduce spending over the next 12 months in light of falling property tax collections and fewer resources from the federal and state governments.

At the federal level, the process of reigning in spending will begin as a result of the first $900 billion federal budget cuts from the Budget Control Act passed earlier this year. The first wave of cuts are spread out over the next 10 years, thus the impact will likely be minimal in the year ahead. However, the more aggressive $1.2 trillion in cuts set to begin in 2013 have the potential to weigh heavily on growth the following year. Continued stalemate in Washington will likely do the same. Nonetheless, federal spending will likely remain more restrained than in years past and should detract from economic growth in the second half of the year.

On the trade front, we expect to see the pace of export growth pull back slightly in light of a modest recession in Europe. However, exports to emerging market economies should continue to help support domestic global producers and, in turn, a moderate pace of corporate profit growth.
Import growth will likely remain constrained with the slower pace of consumer spending. Imports should begin to pick up in the latter part of 2012 as employment growth and consumer spending continue to improve. In the year ahead, we expect net exports to subtract a modest 0.1 percent from headline GDP growth as the trade balance begins to widen in the second half of the year.

A discussion of our forecast for next year would not be complete without addressing the risks to our outlook, which mostly come in the form of policy risks. On the fiscal policy front, we expect unemployment benefits and the Social Security payroll tax reduction to be continued in 2012.

However, the recent failure of the Deficit Reduction Committee in Congress reflects the underlying theme of policymakers’ inability to make tough fiscal policy choices. In light of the additional costs of these payroll extensions after the collapse of the deficit reduction talks, there is a moderate risk that these policies will not be extended, which would put slight downward pressure on personal consumption and, in turn, headline GDP growth next year.

Commercial Loans & Apartment Loans

Commercial Loan Rates]]> General http://www.commercialloandirect.com/blog/index.php?itemid=123 Fri, 9 Dec 2011 12:23:54 -0500 http://www.commercialloandirect.com/blog/index.php?itemid=119
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- Current Commercial Rates]]> General http://www.commercialloandirect.com/blog/index.php?itemid=119 Wed, 9 Nov 2011 15:37:56 -0500 http://www.commercialloandirect.com/blog/index.php?itemid=116
Newly enacted legislation will allow small businesses to refinance existing debt within the 504 program. These permanent changes will permit 504 debt refinancing:

Not Sure How to Refinance Under the 504 Program?

We can show you how to refinance under 504 and even pull equity out of the project for business expenses!

USES Proceeds may be used for the refinance of existing loans whose proceeds were used substantially (85%) to acquire fixed assets eligible for the SBA 504 program. In addition, loan proceeds may be used to pay Eligible Business Expenses such as maintenance of building (no expansion to building), equipment purchases, rent, utilities, inventory or other obligations. These expenses must be incurred but not paid prior to the date of the application or come due within 18 months of the date of the application. All proceeds must have been used for the benefit of the small business concern.

STRUCTURE AND BORROWER EQUITY

50%, varies - Loan secured by a senior lien from a third-party lender for not less than the net 504 loan.
Up to 40% - SBA 504 Loan secured by a junior lien from CP/SBA.
Not <10% - Borrower equity in the existing real estate and/or cash injection as needed. Additionally, the Borrower may pledge equity in any other fixed assets that are acceptable to SBA as collateral.
The Third Party loan and the 504 loan combined may not be more than 90% of the fair market value of the fixed assets securing the loan. In no event may it exceed the outstanding principal balance of the debt refinanced, eligible business expenses & closing costs. COLLATERAL An independent appraisal supporting the fair market value of the fixed assets being refinanced and any other assets being offered as collateral whether commercial or residential must be submitted at SBA application. The appraisal(s) must be dated within six (6) months of the date of application. FEES The Borrower is required to pay an annual guarantee fee to cover the cost of the refinancing program in the amount of 1.043%. ELIGIBILITY REQUIREMENTS
Loans being refinanced must have been current for the past year according to the original or modified terms, with no payment being past due for more than 30 days. Any modification must have been entered into prior to issuance of SBA final rule on 10/12/11. A transcript must be provided to demonstrate compliance with this requirement. For the refinancing of same institution debt, the transcript of account for the entire period of the loan must be provided. This will be used to determine the overall creditworthiness of the Borrower.
No refinancing where the creditor on the debt to be refinanced is in a position to sustain a loss; causing a shift to SBA of all or a portion of a potential loss from an existing debt.
Debt being refinanced must have been incurred not less than two years prior to the date the application is received by SBA. Additionally, the small business concern must have been in business for two years prior to the submission of the application.
Debt may be refinanced even if it does not meet the job creation requirement or other public policy goals set forth by the SBA. In such case, the 504 loan size may not exceed the amount obtained by multiplying the number of full-time equivalent employees (40 hour work week) of the Borrower by $65,000.
Borrower must currently occupy 51% of the building being refinanced.
RESTRICTIONS
No refinancing of loans with an existing federal guaranty; such as an SBA 7(a) or 504 loan or an USDA loan.
No refinancing of debt to an Associate of the Borrower, an SBIC, or New Market Ventures Capital Companies (NMVCC).
When the debt being refinanced is same institution debt, the Third Party Loan cannot be sold on the secondary market as part of a pool of guaranteed loans.
CLOSING
All loans approved must be closed within 6-months. Loans will be canceled by SBA if not funded during this time period.
When loan being refinanced is Same Institution Debt, either an escrow account or an interim loan may be used. When loan being refinanced is not Same Institution Debt, an interim loan must be used.
Any delinquency on loans being refinanced after SBA approval but before the loan funding must be reported to the SBA as an adverse change.
Approved under the Small Business Jobs Act of 2010, the SBA 504 Temporary Refinance Program allows for the refinance of qualified debt under the SBA 504 Loan Program through September 27, 2012.

Effective immediately, Commercial Loan Direct is accepting loan applications that include refinances. Please give us a call if you have questions or would like to discuss a specific situation.

SBA 504 Refinance Loans

SBA 504 Interest Rates

Commercial Loan Direct - The leader in online commercial and apartment loans]]> General http://www.commercialloandirect.com/blog/index.php?itemid=116 Thu, 27 Oct 2011 19:16:35 -0400 http://www.commercialloandirect.com/blog/index.php?itemid=114
First, as the market anticipated and reacted to the Fed policy, the 10-Year Treasury rate fell 30 basis points in four days. Second, the 30-year Treasury rate fell over 50 basis points in the same time period - a huge move and reminiscent of the rate declines in the 30-Year Treasury rate seen after the Lehman Brothers collapse in 2008. The equity markets fell and recorded one of its worst weeks since 2008 while the limited economic data released through the week was mixed. Housing Starts were below expectations (571k vs. 590k); Initial Jobless Claims remain elevated and exceeded expectations (423k vs. 420k); Building Permits were higher than expectations (620k vs. 590k); and Existing Home Sales rose above expectations (5.03M vs. 4.75M). Meanwhile, the G20 finance heads announced on Friday that they are “committed to addressing the renewed challenges” facing the global economy, which did help to stem (at least temporarily) the equity sell-off and flight to safety.

As the Fed ‘twists’ and raises recession concerns in a stagnant job market, and the EU works to save Greece and its Euro union, market anxiety levels have increased (yet again) and the ‘risk-off’ trade dominated last week. This week, the focus will likely shift back to Europe and a fairly heavy economic release schedule of: Housing and Manufacturing data, Consumer Confidence, Durable goods, GDP, Personal Consumption, Initial Jobless Claims, Personal Income and Spending.

Commercial Interest Rates

Commercial Loans

Apartment Loans]]> General http://www.commercialloandirect.com/blog/index.php?itemid=114 Wed, 28 Sep 2011 18:27:27 -0400 http://www.commercialloandirect.com/blog/index.php?itemid=112
Apartment Loans & Multifamily Mortgages


Apartment Loans & Multifamily Mortgage Rates]]> General http://www.commercialloandirect.com/blog/index.php?itemid=112 Tue, 13 Sep 2011 09:48:54 -0400 http://www.commercialloandirect.com/blog/index.php?itemid=110 After being beaten down (again) the week before last, equities and rates were looking for reasons to rise. The big jump up in rates came Wednesday on the Durable Goods release which was 4%, far better than the expected 2%. When combined with an unexpected rise in the House Price Index by 0.9%, (expected 0.2%), the 10-Year Treasury rate rose 14 basis points (0.14%) on the day. On Thursday, Initial Jobless Claims failed again to raise hopes, but the jump to 417k was chalked up to a communications strike. On Friday, a revised 2nd Quarter GDP release showed the U.S. economy grew 1%, versus the previously reported 1.1%, but the release seemed to have little impact on the equity market. Taking a contrary view, the 10-Year Treasury rate fell a few basis points on the day.
This week the market will be busy digesting a flood of month end economic releases, the impact of Hurricane Irene, and any risk-related news. Impacting the market will be: Personal Income and Spending, Pending Home Sales, Dallas Fed Manufacturing, Case/Schiller Home Price indices, Consumer Confidence, FOMC meeting minutes, ADP Employment Change, Chicago Purchasing Manager Index, Factory Orders, Non-farm Productivity, Initial Jobless Claims, ISM Manufacturing, Vehicle Sales, and the all important Non-Farm Payroll report at the end of the week.

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]]> General http://www.commercialloandirect.com/blog/index.php?itemid=110 Wed, 31 Aug 2011 15:34:18 -0400 http://www.commercialloandirect.com/blog/index.php?itemid=108
Partially as a result of the aforementioned factors and partially due to waning investor demand amid heavy supply and broader volatility/uncertainty, new issue spreads widened dramatically. Below are pricing levels for the 10-year AAA bond from recent conduit/fusion transactions:

DBUBS 2011-LC3 (8/11)
GSMS 2011-GC4 (7/22)
WFRBS 2011-C4 (7/21)
DBUBS 2011-LC2 (6/17)
MSC 2011-C2 (6/9)
WFRBS 2011-C3 (5/26)
JPMCC 2011-C4 (5/25) S+200 (30% SUBORDINATION)
S+175 (DID NOT SETTLE)
S+170
S+140
S+148
S+115
S+110DBUBS 2011-LC3 (8/11)


Single-borrower deals didn’t fare any better, with pricing on the WFDB 2011-BXR transaction forced to widen from initial price guidance: the large 5-year AAA off that deal priced at S+200 on 7/28, this is 20 bps wider than the previous single-borrower deal which priced on 7/14.

Undeniably, news from outside our market played a vital role. The not-quite-confidence-building economic data such as the poor ISM Manufacturing data and both the revised and current GDP numbers combined with escalating economic concerns in Europe took their toll on all markets.

Throughout, however, Capital Hill’s brinksmanship over the debt ceiling held the most serious tone and cause for concern. As the government moved closer to possible default and markets became more uncomfortable with the stark economic outlook, investors shed risk and liquidity for risky assets all but dried up. Major equity indices dropped approx. 10%, 2YR UST yields fell to record lows below 0.30% and GG10 steadily widened, 50 bps the week of 8/1/11 alone, closing at S+250. And of course, this came to a head with S&P’s historic downgrade of the US long-term debt rating post-close on Friday August 5th. Markets reacted severely on Monday: DOW -5.5%, S&P -6.6%, NASDAQ -6.9%, GG10 +95 bps to S+400 bps (the widest since June 2010). Secondary CMBS 2.0 spreads widened in tandem, with 10-year AAA’s widening to S+250 or more.

Since then, stocks and spreads have made a move off of the local lows/wides. This has translated into gains for CMBS, with the benchmark GG10 A4 trading at S+290 (still approx. +50 from YE 2010) and 2.0 10-year AAA’s near S+200 (approx. Cash players have been supporting the secondary market by purchasing high quality AAA and AMs, but that is the extent of their focus. On the synthetic side, much of the same theme has played out as prices rise across series, but the “money good” tranches (AAA, seasoned AM) and more vintage series have benefited most. Bids for credit bonds have dried up, forcing a steepening of the curve, and should remain a tough sell until growth forecasts tick up and/or negative CRE headlines abate (Deutsche Bank recently raised loss forecasts for CMBS deals and there was a corresponding story run on Bloomberg, an unrelated CRE story ran a day prior in the WSJ).

The CMBS market certainly appears stronger than a week ago – DB/UBS successfully priced a $1.4B conduit transaction in the midst of the sell-off - but secondary trading volumes have slowed down and uncertainty and fear of a double dip recession remain the largest obstacles to recovery.

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Commercial Loan Direct ]]> General http://www.commercialloandirect.com/blog/index.php?itemid=108 Thu, 25 Aug 2011 18:32:58 -0400 http://www.commercialloandirect.com/blog/index.php?itemid=107
While the index is almost ready, Markit wants to wait until after Labor Day to debut it because many market participants are on vacation in August. It also wants to start off the index with the largest possible pool of referenced securities, including those from a $1.5-billion conduit issue that Wells Fargo and RBS priced on July 21 and a $1.7-billion offering that Deutsche Bank and UBS priced this week.

The new index will track daily price movements on triple-A-rated, multi-borrower CMBS with weighted average lives of 8-12 years that were floated since last year. So far, Markit has identified more than $7 billion of bonds from 18 conduit deals that meet the criteria. Ultimately, the index will reference securities from the 25 most-recent qualifying CMBS issues, updated on a quarterly basis.

The index will provide a basis for creating and pricing total-return swaps. That would enable CMBS lenders to short senior bonds from the latest crop of deals, thereby hedging their long positions -- namely, loans they’ve written and stockpiled for securitization. Dealers would seek counterparties to take the opposite sides of derivatives pegged to the index.



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Commercial Loan Direct]]> General http://www.commercialloandirect.com/blog/index.php?itemid=107 Wed, 17 Aug 2011 15:37:35 -0400 http://www.commercialloandirect.com/blog/index.php?itemid=105
The sharp drop in bond prices further complicates the outlook for CMBS lending. After standing at 105 bp over swaps in early June, triple-A spreads have now widened 65 bp. CMBS shops are going back to borrowers under application and repricing those deals to reflect the new economics as well as resetting internal loan pricing for new applications.

Since the benchmark triple-A class represents approximately 85% of a CMBS issue, there is nearly a 1:1 relationship between the increase in the spread widening from 140 bp a few weeks ago and the current 170 bp level. “Our borrowers have been repriced by about 30 bp this week, after a 40 bp jump a few weeks ago when the spread on the benchmark triple-A class moved from 105 bp to 140 bp,” said Sneden. “Luckily, we are able to explain the market changes to our borrowers in a way they can understand and no one withdrew their applications. But if spreads do not reverse, it will likely create a slowdown in new applications.”

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Apartment Loans & Multifamily Mortgages]]> Commercial Loans http://www.commercialloandirect.com/blog/index.php?itemid=105 Tue, 2 Aug 2011 11:03:04 -0400