Archive for December, 2008

Greetings of the Season!

December 24, 2008

MasterPlan Capital would like to wish all our clients, friends, and partners a very merry Christmas and a happy, prosperous new year.

Commercial Mortgage Delinquency Rates Are Miniscule

December 20, 2008

Make no mistake; there are plenty of reasons to be plenty gloomy.
But did you know that commercial mortgage delinquency rates are at the low end of their historic range? Or put in simpler terms; commercial mortgage loans are doing fine.

For example, according to recent research by the Mortgage Bankers Association, of the $1,200,000,000 ($1.2 Trillion) dollars of outstanding commercial mortgage debt held by banks and thrifts, less than 1.5% is delinquent by 90 days or more.
Now 1.5% of $1.2T is not chicken feed, in fact it’s almost $20B. But on a percentage basis, commercial and multi-family loans are holding up nicely. Life insurance companies along with mega lenders Fannie & Freddie are also faring very well in the commercial arena. All are reporting a delinquency rate of well under 1%.

If things get much worse before they get much better, these low delinquency rates won’t stay low. But it the opposite happens and thing start improving, commercial mortgages may (just may) end up dodging the cannon ball.

MasterPlan Capital LLCCommercial Mortgage Loans – Private & Institutional Funding – Simple, 1 Page Commercial Mortgage Application; Online – Prompt, Professional Service

Commercial Mortgage Loans; MasterPlan Capital

December 20, 2008

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NAR: The Commercial Mortgage Industry Needs Liquidity Too!

December 18, 2008

The National Association of Realtors (NAR), the trade group that represents real estate agents and brokers, is reminding the Government that commercial mortgage paper needs love too. Lawrence Yun, the NAR’s Chief Economist is encouraging the Federal Government to step in. Wednesday (12/17/08) in an interview with Reuters Mr. Yun remarked: “Although access to residential mortgages has improved, the opposite is true for commercial loans,” said Lawrence Yun, NAR’s chief economist. “We need liquidity for commercial mortgage-backed securities not only to free the market, but also to rollover existing debt,” And by “need liquidity” he means the taxpayers ought to buy new and existing commercial mortgage debt. “The commercial real estate market is frozen because there is no government backstop. Lenders are not making commercial loans because there are no private investors who want to hold them.”

He’s got a point about the commercial mortgage debt market; very few private dollars are being committed to this area. But is Government intervention a help or a hindrance to recovery? By backing residential mortgage paper but not commercial the Fed’s have inadvertently caused investors to abandon the commercial space for the security of the Government bed-spread that is covering residential.

Indeed, Barclays is touting the relative health of the multi-family mortgage market. Why? Because Fannie and Freddie are buying apartment building paper like crazy. But when money flows to Government backed paper there is not much left for private paper.

Our firm, MasterPlan Capital LLC, has acces to both private and institutional funding sources and is able to originate commercial mortgages against most types of commercial real estate.

Click the link to use our simple, 1 page commercial mortgage application.

Partners at MasterPlan Capital Decide to Raise Minimum Commercial Loan Balance.

December 17, 2008

MasterPlan Capital announced today that it will no longer originate commercial mortgage loans with balances less than $1,000,000.00 for new clients.

MasterPlan will honor all current commitments and will consider smaller balance loans for existing customers of the firm, but will no longer process new client applications for loans under $1MM.

Prior to this decision MasterPlan had a $500K minimum for institutional, fully underwritten commercial mortgage loans.

“Economic realities are such that we can not entertain every scenario that comes across our desk. Unfortunately we will now have to pass on some very good deals but, on-the-other-hand; we will have more time and resources to devote to our core businesses”

Note: Borrowers and Sponsors may apply for a MasterPlan Capital commercial mortgage loan, online.
Our simple 1 page commercial mortgage application is easy to complete and clients get an answer the very next business day.

Alternative Commercial Mortgage Lenders – Hedge Funds & Private Equity

December 17, 2008

Hedge funds and private equity firms are investment companies set up by Wall Street investment banks and funded by wealthy individuals and cash rich corporate entities. Unlike standard, publicly traded mutual funds, hedge funds are largely unregulated and have much more leeway in their investment choices. Many of these funds have recognized the opportunity that’s emerged in commercial real estate lending, and have stepped in to fill the funding gap. The money managers in charge of these massive pools of capital are savvy investing pros, they know a good deal when they see it and can be very nimble. Hedge funds and private equity funds are not afraid of risk; in fact they thrive on it. If they like a deal, they make decisions quickly and can close loan or equity financing in just days.

There are many private funds that specialize in commercial real estate investing or have a commercial mortgage lending division. They are cash rich and actively seeking quality deals to fund. They can be an excellent alternative to banks and other traditional lenders.
But, be aware, they are very professional and highly sophisticated. Do not approach hedge funds with shoddy or incomplete packages. They’re pros and work exclusively with other pros.

Hedge fund and private equity people have a Wall Street mentality; they are traders art heart. When they look at a deal they want to be able to make decisions quickly.

When approaching a fund you’ll want to have a complete, well documented package ready to show them at a moments notice, but don’t give it to them all at once. Having worked for Wall Street firms for more than 20 years, I’ve determined that the best way to approach money mangers is with a concise, well written 1 page deal summary.

Sum-up the selling points of your deal on a single sheet of paper, stressing the profit potential, the investors level of experience, the strength of the location and some of the other strong points of the project. They’ll appreciate the fact that you respected their time by being brief. If they like what they see they will ask for more. Give them precisely what they ask for; don’t bog them down with documentation until they tell you they want to see it. Sell them the big story before you try to sell them the details.

If you want to secure funding from a big private equity shop or a hedge fund, I’d strongly suggest you utilize the services of a professional intermediary with Wall Street experience. They can speak the language of fund managers and know exactly what’s important to highlight about a particular deal. These funds tend to operate like private clubs, it helps a-lot if you have an “in”. If you are fortunate enough to develop a relationship with this unique type of lender, you will enjoy a seemingly endless source of capital.

MasterPlan Capital – Commercial Real Estate Investment Banking – Commercial Mortgage Loans – Equity Financing – Asset Management – Prompt, Professional Service – Quick Closings Available
The author, Glenn Fydenkevez, has more than 20 years experience working with Wall Street Investment brokerages firms. He is currently the President of MasterPlan Capital LLC.

Wentz, CEO of Investors Real Estate Trust (IRET), Has Seen Worse Times, but Never Worse Sentiment

December 15, 2008

On the quarterly earnings conference call for Investors Real Estate Trust (IRET) Thomas Wentz Sr., the CEO of the firm, made a very interesting comment, he said: “I have certainly seen worse apartment and commercial real estate conditions in [his tenure with the firm]. However, never do I recall the current level of predicted gloom, doom, and pending disaster.” Later on in the call, in response to a shareholder who asked if this crisis is as bad as the warnings about it have been, he reiterated the same sentiment saying “Not yet, it is not. Certainly our company has been through more severe downturns in the 80s and the 90s that took down Trammell Crow and other long-standing real estate companies and we had no difficulty in that period, and I would say at this point we are still not seeing any problems. But I would say that I don’t know that I have seen such doom and gloom presented from the media and a meltdown that seems to apply to every segment of our economy.”

We get the feeling that Mr. Wentz isn’t buying in to the “end times” scenarios that are so prevalent today. He is, however, not ignoring the economy or the credit crisis either.

We encourage anyone interested in the full context of Mr. Wentz’s remarks to read the full transcript of the call.

MasterPlan Capital LLC offers private and institutionally funded commercial mortgage loans, equity financing and asset management services to commercial real estate investors, property owners and developers nationwide. Borrowers may use our simple, 1 page, online commercial mortgage application and receive an answer the very next business day.

Consolidation in the Commercial Mortgage Industry; Grandbridge Acquires Live Oak

December 15, 2008

The Wall Street Journal’s Market Watch (weekend) recently published a press release announcing the acquisition of Live Oak Capital Ltd. by Grandbirdge Real Estate Capital LLC.
Less business to go around means that we should expect to see more consolidation in the commercial mortgage sector.

www.masterplancapital.com

Commercial & Multi-Family Mortgage Delinquencies Remain Near Historic Lows…For Now…

December 15, 2008

We are in a weak economy that appears to be getting weaker by the day and we are in a severe credit crunch that would be getting worse except for the fact that it is already as bad as it can possibly be. Yet, despite all the doom and gloom, commercial mortgage loans (like the ones MasterPlan Capital originates) are holding up quite well.

A recent report by the Mortgage Bankers Association noted that, although delinquency rates for commercial mortgages edged up slightly in the third quarter, they remain at “the lower end of their historic range”

Financial Week goes as far asking if commercial mortgages aren’t a “bright spot” in the bleak world of property lending.

Commercial has not and should not suffer like residential lending did. We commercial real estate types never embraced “sub-prime” lending the way our wayward brothers in the end-use-consumer sector did. However, readers of this blog know that every business journalist with a keyboard and a press pass is predicting that commercial mortgage loans will falter as the economy weakens. We agree that commercial mortgage performance will deteriorate in correlation with the business cycle, while disagreeing with those who are predicting the end of the world as we know it.

Check out our simple, 1 page, online commercial mortgage application. It’s easy to complete and clients get an answer the very next business day.

www.masterplancapital.com

Commercial Mortgage & Finance Co. (of Rockford IL) Suffers $4MM Loss, Declares Bankruptcy

December 15, 2008

I read of a little savings and loan having some trouble…Normally I wouldn’t even bring it up, but I had to share this quote from the company’s CEO:

“We never, ever had a problem until the turmoil in the real estate business”

We would remind him of what Publilius Syrus said in 100 BC:

“Anyone can hold the helm when the sea is calm”

MasterPlan Capital is a thriving commercial mortgage lender, not in bankruptcy. Apply for a commercial mortgage loan online, get an answer the very next business day.