ICSC Conference
This past May, 1st Service Solutions had the pleasure of attending the 2011 International Council of Shopping Centers (ICSC) ReCon conference in Las Vegas, where they met with business owners and commercial real estate investors from all over the country – and the world. We are happy to report that, overall, the tone of the conference was exciting and optimistic, and there are some interesting changes and developments brewing in the commercial real estate industry.
Highlights from the ICSC ReCon Conference
Overall, we were encouraged to learn that the commercial mortgage market seems to be gaining momentum. It also appears that, with the slow but steady economic recovery, lenders are actively seeking to provide capital for commercial real estate. Here are some of the most important trends and highlights that 1st Service Solutions came across at the ICSC conference with regards to the CMBS loan industry and the direction that it is heading in:
1. Lenders are focused on increasing (10%-20%) loan allocations for 2011 over 2010.
2. $68 Billion of CMBS loans will mature in 2011.
3. An estimated $10 billion of CMBS loans are “small balance” loans, ranging from $1M-$10M.
4. Apartments, NNN and grocery-anchored retail are the favored asset classes for lenders.
5. Rising treasuries (rates) could negatively impact loan proceeds. Properties in need of refinancing should start the process now.
6. LTVs (loan-to-value ratio) are up to 80% now. Most loans are 70% LTV or less.
7. Interest rates now range from 5% to 6.75%, depending on loan structure.
8. Many lenders are considering offering bridge loan programs, a great incentive for those looking for help with their properties.
9. CMBS is back with over 25 players in the market. They are mainly looking at A and B assets.
10. FNMA is taking some markets off pre-review status. More details on this, hopefully to come soon.
11. Life Company financing returns as a major player– with more conservative underwriting.
12. Banks are becoming an increasing active player in the CRE lending market in 2011.
2. $68 Billion of CMBS loans will mature in 2011.
3. An estimated $10 billion of CMBS loans are “small balance” loans, ranging from $1M-$10M.
4. Apartments, NNN and grocery-anchored retail are the favored asset classes for lenders.
5. Rising treasuries (rates) could negatively impact loan proceeds. Properties in need of refinancing should start the process now.
6. LTVs (loan-to-value ratio) are up to 80% now. Most loans are 70% LTV or less.
7. Interest rates now range from 5% to 6.75%, depending on loan structure.
8. Many lenders are considering offering bridge loan programs, a great incentive for those looking for help with their properties.
9. CMBS is back with over 25 players in the market. They are mainly looking at A and B assets.
10. FNMA is taking some markets off pre-review status. More details on this, hopefully to come soon.
11. Life Company financing returns as a major player– with more conservative underwriting.
12. Banks are becoming an increasing active player in the CRE lending market in 2011.
1st Service Solutions
As the CMBS market ushers in the second half of 2011, 1st Service Solutions was thrilled to be a part of the ICSC ReCon conference and is excited about the major changes happening in the commercial real estate loan industry. Keep checking back for more updates on how the CMBS industry is progressing, and how 1st Service Solutions can help you navigate through the waters of uncertain economic times.
As the CMBS market ushers in the second half of 2011, 1st Service Solutions was thrilled to be a part of the ICSC ReCon conference and is excited about the major changes happening in the commercial real estate loan industry. Keep checking back for more updates on how the CMBS industry is progressing, and how 1st Service Solutions can help you navigate through the waters of uncertain economic times.