All posts by Bonne

Apartment Building Owners Face Higher Rates on Loans

It has suddenly gotten a lot more difficult to borrow money for an apartment property.

“The overall cost of borrowing has gone up undoubtedly,” says Peter Smyslowski, managing director in the San Francisco office of capital services provider HFF. “But the interest rates spreads offered by lenders are very similar to the spreads they offered last year.”

Long-term interest rates rose by well over 50 basis points in the last months of 2016,

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The End of the Low Interest Rate Environment?

Fed officials raised the target for short-term interest rates by 0.25 percentage points on December 14. The Fed’s most recent forecast projects U.S. economic growth in 2017 to be 2.1 percent, slightly better than the Fed’s previous projection in September.

Trump’s expansionistic policy rhetoric—pledging significant spending on new infrastructure, higher exports, higher import tariffs, lower taxes and reduced regulation—could spur inflation and lead to higher interest rates. Many have predicted the end of the 35-year bond bull run and the end of record-low interest rates.

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Takeaways on Tax Reform from NMHC Annual Meeting

Among the first sessions was a joint finance and tax committee discussion of the impact of the Better Way tax reform “blueprint” proposed by Republican House Speaker Paul Ryan.

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Apartment market fundamentals prompt banks to pull back

The apartment market’s swelling pipeline is threatening to outpace demand for multifamily housing, prompting banks to pull back from this asset class and forcing builders to seek other forms of finance, such as mezzanine loans. Rent decreases in some markets and increasing vacancies are part of the concern for banks.

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How Attractive is the Stretch Senior Loan?

We are in a competitive financing environment, with debt and mezzanine lenders competing for borrowers. As alternative lenders step up their activity this year, the stretch senior loan is a hybrid product that borrowers can turn to.

Stretch senior is a loan provided by a single lender that goes to a higher leverage position with more layers of debt, according to Ari Hirt and Jordan Ray, managing directors of the debt and equity finance group at Mission Capital Advisors, a capital markets solutions firm.

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What a Trump Administration Means for Banking Regulations

The presidential election has unleashed a frenzy of speculation as to what exactly a Trump administration might mean for the commercial real estate industry. Although detailed plans and key appointments are still emerging, Trump has been crystal clear on his intent to ease banking regulations and financial industry reforms.

Although both the Dodd-Frank Act and Basel III international banking standards will be targets, it appears as though Dodd-Frank is the bigger priority. “I think it’s pretty clear that Trump is going to roll back on Dodd-Frank, which is probab

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How the Strategic Opening of Retail Stores Can Revitalize City Neighborhoods

The opening of a new retail store or restaurant can quickly bolster a neighborhood, creating cascading benefits for the residents ranging from access to healthy food and convenient services to increased property values and safer streets.

Here are six snapshots of how the opening of retail stores dramatically upgraded Chicago neighborhoods that had fallen on lean times:

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Recent Income Growth Will Have Limited Benefits for CRE

The U.S. Census Income and Poverty 2015 report was a positive one for the economy, with a 5.2 percent growth in median household incomes last year. But that doesn’t mean Americans have more spending money. Middle class households may be better positioned to cover their expenses, but they may not be increasing their spending on retail and recreation anyway, industry sources say.

“There are now more people with jobs; that is driving the economy,” says Rene Circ, director with real estate research firm CoStar Portfolio Strategy.

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Drone Technology Might Guide the Next CRE Investment Boom

Drone technology has become a multi-billion-dollar business, as consumer uses multiply and the U.S. military begins phasing out manned vehicle operations in favor of unmanned flights, leading real estate investors and developers to pay attention.

The Association for Unmanned Vehicle Systems International (AUVSI) predicts that drone production will grow to $82.1 billion and more than 100,000 jobs across the country by 2025, assuming that the Federal Aviation Administration (FAA) cooperates.

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How Looming Tax Reforms Might Impact CRE Industry

Tax reform has become a central focus on the “what’s ahead” discussions swirling around President-elect Trump’s agenda. That topic has moved to the forefront for good reason.

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