Archive for June, 2011

The Fed’s Second Round of Quantitative Easing (QE2) Wasted another $600 Billion; who’s up for Round 3?

June 30, 2011

From the stand-point of the commercial real estate industry, QE2 was a $600 billion dollar bust. Rates stayed low but lending stayed anemic. Trophy assets changed hands and big players with cash on their balance sheets got loans while bread and butter assets floundered because banks aren’t lending to the small operators or the mom and pops.

To further exasperate and prolong the problem, banks did not unload nearly enough of their problem loans or problem real estate. Why should they when they can stay solvent by borrowing money for free?

QE1 and QE2, while adding substantially to our national debt, did not solve our problems, it only allowed us to tread water and search the horizon for a rescue boat that we now must realize is not coming.

So what now? Do we print more money and buy the US Bonds that no one else will, or do we let the markets price our debt and go bankrupt?

Globe Street expresses the frustration that CRE execs feel in this recent post.

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Credit Tenant Lease Lending Criteria – Large Fixed Income Fund Looking to Fund CTL loans – Here’s What’s Needed to Qualify

June 27, 2011

Commercial Mortgage Lender, MasterPlan Capital LLC, is corresponding with a large ($20b) fixed income fund that is actively seeking to fund credit tenant lease loans against single tenant, net leased real estate. Transactions that fit the criteria (below) can fund in as little as 45 days.

Loan: Commercial Mortgage, Purchase or Refinance
Collateral: Stand Alone, Single Tenant, Net Leased Real Estate
Type: Office, Retail, Warehouse, Distribution Center, Data or Light Industrial
Lease: Triple Net (NNN), Double Net (NN) or Bondable, 10yr +
Tenant: BBB+ (or better) by S&P or Ba1 (or better) by Moody’s, or Equivalent.
Term:  Co-Terminus with Lease
Amortization: Full, Self Amortizing
Rate: Fixed, Interpolated US Treasury + Small Margin
Recourse: Non-Recourse
LTV: No Restrictions on LTV (To 100% LTV subject to DSCR)
DSCR: 1.05x
Minimum: $5,000,000.00
Maximum: Virtually No Maximum

Click Here / Apply for A CTL Loan or call 800-727-5140 x 101

 

Accredited Investor Qualifications – Who Can Buy Commercial Real Estate Private Placements?

June 21, 2011

As commercial real estate investment bankers we may sometimes have occasion to raise money in various private placements or other equity arrangements.

It is our policy to only offer such opportunities to “accredited investors” even in cases where some non-accredited investors could legally participate.

This begs the question: Who qualifies as an accredited investor?

We follow the Federal securities law definition and consider an accredited investor to be:

1. a bank, insurance company, registered investment company, business development company, or small business investment company;
2. an employee benefit plan, within the meaning of the Employee Retirement Income Security Act, if a bank, insurance company, or registered investment adviser makes the investment decisions, or if the plan has total assets in excess of $5 million;
3. a charitable organization, corporation, or partnership with assets exceeding $5 million;
4. a director, executive officer, or general partner of the company selling the securities;
5. a business in which all the equity owners are accredited investors;
6. a natural person who has individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase;
7. a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year; or
8. a trust with assets in excess of $5 million, not formed to acquire the securities offered, whose purchases a sophisticated person makes.

Fannie Mae; Scandal on a Monumental Scale – NY Times Op Ed and New Book Chronicle Massive Corruption

June 17, 2011

Fannie Mae, it turns out, is a bigger scam than Bernie Madoff could ever have dreamed of; a sad, expensive and disgusting example of corruption and cronyism that derailed the economy of our country. NY Times Op Ed columnist, David Brooks has penned an indispensible summery of an important and valuable book.

Read the Op Ed here. Get the book here.

Learn from history or be destine to repeat it.

Presidential Approval Chart: Obama About to Hit New Low

June 14, 2011

Rasmussen has Obama trending in the wrong direction. He is poised to hit his lowest populartity numbers ever and will achieve this historic milestone by the 4th of July if things keep going the way they’re going.

Obama about to make history: New Low

Read the details here: Daily Presidential Tracking Poll

UPDATE:   Gallup – Obama’s bin Laden Bounce Gone!

The Bounce Obama Enjoyed after the Killing of bin Laden has Dissappeared

Details Here: http://www.gallup.com/poll/148046/Obama-Approval-Rally-Largely.aspx

 

Credit Tenant Lease Loan Rates Down in Correlation with US Treasury Bonds – Rates in the 4%s or Lower for Best Tenants

June 13, 2011

US Treasury Bond rates have been trending down lately (See chart below).

As many of you know, credit tenant lease loans are priced based on an interpolated Treasury Bond yield plus a small margin spread. When T Bond rates go down CTL rates go down with them.

T Note Yield

10 Year US Treasury Note 6/13/11

Mortgage rates on buildings with the best tenants with long-term, NNN, NN or bondable leases are being priced in the mid 4% range (+/-) or even lower.

With the fed contemplating the end of QE2 and the credit worthiness of the USA continuing to deteriorate, rates are sure to start to rise sometime. Investors with single tenant, NNN assets leased to credit worthy tenants would do well to refinance (or buy more) now while rates are very reasonable. They won’t be forever.

Latest Round of Economic Numbers Tell us One Thing: We’re Lost

June 10, 2011

In the days before GPS navigators were omnipresent (just 36 months ago) people would get lost in strange cities and towns. Most of us know the feeling, that moment of realization when, from behind the wheel, you must admit to yourself and your spouse that you have not a clue where you are or how to get where you want to be.

The latest round of unemployment numbers and economic growth figures inspires the same kind of feeling. We’re lost, we are not making progress towards our destination and the driver is obstinately still claiming that he knows the way.

He doesn’t.

Read Help Wanted by the Editorial Staff at NRO

More Liquidity for Multi-Family; Freddie Mac Adds Adjustable Rate Mortgages (ARM)

June 7, 2011

Freddie Mac recently announced that adjustable rate mortgage (ARM) loans are now eligible for securitization into Freddie Mac Multi Family Mortgage Backed Securities (K Certificates).

ARMs will now be purchased by Freddie through its CME multi family mortgage loan execution path. The loans will be bought from approved lenders in Freddie’s network, pooled with other eligible loans, securitized by Wall Street investment bankers and sold to the public.

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MasterPlan Capital LLC; Commercial and Multi-Family Mortgage Loans, Equity Financing & Asset Management.  View our commercial real estate finance services, see how we do business or apply for a commercial mortgage loan. Our simple (1 page) commercial mortgage request form takes only a moment to complete and you will receive prompt, professional service.                                        

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Liquidity is, of-course, welcome as we continue to work out of our credit malaise, but as we have said before, it is somewhat disconcerting that such a large percentage of all multi family lending must come from the Government.

Click Here to Learn More about Freddie Mac Multi Family ARM Loans.