Commercial Observer的动态

Commercial Real Estate Note Purchases: Lender’s Loss, Investor’s Gain by Jonathan Stein from Goulston & Storrs More than two years have passed since the Federal Reserve seismically shifted its fiscal policy and began hiking interest rates. With no signs that rates will go down any time soon, approximately $2.0 trillion of commercial real estate mortgages are scheduled to reach maturity from 2024 through the end of 2026. Banks with troubled loans on their balance sheets face increased regulatory and internal pressures to dispense with these bad loans, often at a discount and sometimes even with seller financing to a would-be note purchaser. #federalreserve #realstate #mortages #banks https://lnkd.in/dEpJf3VQ

Understanding how to navigate the complexities of commercial mortgages amidst rising interest rates is key for today's investors. View our latest piece on strategies to turn challenges into advantages, from seizing discounted property prices to smart refinancing moves. Discover how to thrive in today's market with Essex Capital Markets expert insights. https://bit.ly/49tzgQ4 #essexcapitalmarkets #chicagocre

The second half of the year will see more borrower-friendly multifamily lending as rates decrease, spurring activity and reducing the impact of maturing loans. Strong sponsors and well-performing markets will be the focus, with agencies regaining market share. Banks, life companies, and CMBS lenders will be major players, with underwriting becoming more conservative and lenders targeting properties in top markets that are 15 years old or less.

Floating rate debt is incredibly stupid. Arbor Group, one of the largest lenders in multifamily is facing a wave of late payments on this type of debt. Developers should have learned from the billions in losses that hit the residential sector in the Great Recession when thousands of people lost their homes due to variable rates. When you have a floating rate, your downside is unlimited. As rates increase, your monthly payments go up which severely cuts your cashflow. If rates go high enough, raising the rents will not be enough to stave off default. Some purchase hedges to protect against the risk of rising rates. However, those hedges have short terms that do not protect you when interest rates stay high for a longer period. Our debt strategy is quite simple: fixed-rate non-recourse debt for the longest term possible. This gives us the flexibility to refi when rates go low OR hold onto our rate when rates increase. Projected cashflows are easier to predict when you know the cost of your debt. Floating rate debt is like playing Russian Roulette; it is only a matter of time before your luck runs out. #inflation #interestrates #debt #apartments #multifamily The Wall Street Journal

??? Navigating the Complexities of Commercial Real Estate Financing in Today's Market ?? As inflation continues to hold steady, the Federal Reserve's decision to postpone expected interest rate cuts has posed challenges for commercial real estate lenders and borrowers alike. With nearly $929 billion of outstanding commercial mortgages set to mature this year, finding solutions in a climate of rising rates has become paramount. In a recent report, Alan Todd, head of research for U.S. commercial mortgage-backed securities at Bank of America, highlighted the increasing trend of troubled loans being retained by lenders, awaiting potential rate cuts. This cautious approach, while providing temporary relief, underscores the urgency for sustainable solutions in the face of uncertainty. Amidst this landscape, borrowers facing impending loan maturities are exploring refinancing options. However, the terms offered often exceed expectations, reflecting the broader market dynamics. Despite these challenges, recent loan modifications indicate proactive efforts by lenders to address problem loans. By negotiating refinancing or extensions, they are navigating the complexities of today's market with resilience and adaptability. As we navigate this evolving landscape, it's essential to stay informed and proactive. Let's continue to collaborate and innovate to ensure the resilience of the commercial real estate sector in the face of ongoing challenges. ???? #CommercialRealEstate #Finance #MarketTrends #Resilience #Innovation #finance #accounting #realestatemarket https://lnkd.in/gHyf82WK

Most variable-rate commercial real estate loans use the Secured Overnight Funding Rate (SOFR), a short-term interest rate, as their benchmark rate. CRE borrowers pay some spread based on their credit risk over a one-month SOFR rate. Therefore, while Treasury rates and the fed funds rate indirectly impact CRE mortgage rates, SOFR impacts many of them directly. The market overwhelmingly expects fed funds rate cuts this year, and it is expecting similar declines in SOFR as well. One way to measure the market’s expectations of the SOFR at a given moment is with the SOFR forward curve. The forward curve represents current market expectations of the SOFR at different points in the future (the curve itself is derived using SOFR futures contracts). Currently, the one-month SOFR sits at about 5.3 percent, and the market is expecting it to decrease by over a full percentage point to 3.7 percent at the end of 2024. Were this to occur, some cash strapped owners that are struggling to meet debt service now could become cash flow positive, which would somewhat limit the quantity of distress that occurs in 2024. First American Title 207.774.6884 707 Sable Oaks Drive, Suite 370, South Portland, Maine https://lnkd.in/gqGChjcz #FirstAmericanTitle #FirstAm #titleagency #MErealestate #MErealestate #MEtitle #MErealtors #MErealestateagents #METitleService #MERealEstateServices #MEtitleinsurance #firstameconomics #crexfactor

Nearly 20% of outstanding debt on US commercial and multifamily real estate — US$929 billion (RM4.43 trillion) — will mature this year, requiring refinancing or property sales. The volume of loans coming due swelled 40% from an earlier estimate by the Mortgage Bankers Association (MBA) of US$659 billion, a surge attributed to loan extensions and other delays rather than new transactions. With the Federal Reserve (Fed) signalling that it’s done hiking interest rates, it’s likely more deals will get done this year, according to Jamie Woodwell, the head of commercial real estate research at the bankers group. “Volatility and uncertainty around interest rates, a lack of clarity on property values and questions about some property fundamentals have suppressed sales and financing transactions,” Woodwell said in a statement on Monday. “This year’s maturities, coupled with greater clarity in those and other areas, should begin to break the logjam in the markets.” Click the link in bio, highlights, or below to view the full article: https://lnkd.in/dZHP5G3P ??? ??? ??? ??? ??? #CommercialRealEstate #Glendalerealesstate #Lacrascentrealestate #GharibianRealEstateandFinance #SBAloan #MortgagehomeLoan #commercialloans #ResidentialRealEstate #RealestateInvestment #BurbankRealestate #Southerncaliforniarealestate #Sanfernandovalleyrealestate #Sangabrielvalleyrealestate #Glendalehomeloans #Pasadenahomeloans #southercaliforniahomeloans #Ronniegharibian #blueinvestmentcorporation #firsttimehomebuyer #mortgageloanapproval

The wall of rolling commercial real estate (CRE) loans is turning up the temperature in a debt market that is already feeling significant heat from higher rates and less liquidity. Loan maturities have pushed to the forefront as a hot topic for good reason. The looming wave is substantial, with near-term maturities that represent more than 40 percent of the $4.4 trillion of outstanding CRE mortgages. According to estimates from the Mortgage Bankers Association, roughly $725 billion in commercial and multifamily mortgages were set to mature in 2023, followed by another $1.2 trillion in loans coming due over the next two years. #CREmaturities

Delinquency rates for multifamily loans have surged, hitting an 81.3% year-over-year increase, the highest since Q2 2013. Banks like Citigroup and M&T Bank face growing delinquencies, signaling distress in the multifamily sector. With net charge-offs on the rise and banks exposed to rent-controlled properties at risk, the financial landscape for lenders looks increasingly challenging. A clear call for strategic reassessment in the face of mounting pressures. https://lnkd.in/g9p774W7

Loans are maturing in 2024 and sales of financially distressed properties can reduce market value of nearby properties...the buying season for prepared investors is near.