2009 is now a distant memory. During 2011 life insurance
companies had an excellent year of loan origination at $45 Billion. 2012
promises to be even better. Underwriting standards have improved as
lenders compete for the highest quality transactions. The Commercial
Mortgage Banking Conference (CREF) was held in February. Attendees
include commercial mortgage bankers, life insurance company lenders and CMBS
lenders. The conference began a fever of activity and re-pricing as
lenders gathered intelligence about the competitiveness of the market.
Surely underwriting will become more aggressive during the year as competition
heats up further.
This will be a year of continued low, long-term interest
rates, competitive pursuit of the highest quality transactions and the return
of CMBS as a real source of debt capital, barring any unexpected blips in the
financial markets. Five-year rates are in the 3.0’s, 10-year rates are in
the 4.0’s. Favored property types continue to be multi-family,
grocery-anchored retail, multi-tenant industrial and single-tenant credit
properties. 2012 is going to be a great year for the permanent debt
capital market.
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