The abundance of capital available for commercial real estate is driving lenders to present aggressive terms and respond to the needs of owners and developers when vying for deals throughout the New York metropolitan area, the Mid-Atlantic region and Florida. This liquidity exists at all pricing and lending levels.
Even though transaction volume has declined since early 2016, it remains well above historical averages. Looking to 2018, interest rates and terms will likely remain favorable, even with so much rollover debt coming into the market. More than $1 trillion worth of U.S. commercial real estate loans is set to mature over the next three years.
Demand for Private Lending on Transitional Assets and Those Nearing Stabilization
Banks and the CMBS market have continued to originate loans for stabilized properties, although are much less active than their pre-recession levels. This pullback has created even more demand for private lenders to originate loans, particularly for transitional assets and those nearing stabilization.
In response to the needs of clients and market conditions, Case Real Estate Capital, LLC (Case) recently introduced a small loan program that originates lower-interest loans in the $2 million to $8 million range for properties nearing stabilization. This ‘bridge light’ small loan program covers all asset types, including office, retail, industrial, manufacturing, hospitality, self-storage and selected entitled land. Typically, these loans will have an initial term of one to two years with extension options of up to two years. Case’s goal, with all of its lending, is to create additional profit opportunities for property owners and developers.
Case’s areas of interest – New York metro area, Mid-Atlantic region and Florida – have performed well in the decade since the financial crisis peak of 2007 and are poised to continue that trend throughout 2018 and beyond.
Sanford Herrick is founder and managing principal of Case Real Estate Capital, LLC.
Industry veteran Sanford Herrick has orchestrated investments in more than $5 billion worth of commercial properties. In 2013, he founded Case, which has surpassed the $125 million mark in investments.