Life Insurance Companies read more

Life insurance companies invest in commercial real estate for long-term growth, generally due to the length of their policies and their desire to have sufficient capital available when payouts are due (often decades from the onset of the policy). Because of their long-term view of capital, life companies are most favorable for investors looking to lock in low rates for many years, those who want to know their debt service for the next decade (or longer!) without fluctuation, and those who want local loan servicing without the hassle of dealing with multiple parties after closing. Life companies can be relatively conservative lenders, and typically prefer loans 75% LTV or less.

Life Insurance company examples listed at the bottom.

Benefits

• Inexpensive, long-term debt
• Fully amortizing, non-recourse and limited recourse structures available

Agency read more

Fannie Mae and Freddie Mac are government-affiliated agencies that insure loans against default by issuing government bonds.

Interest Rates

Benefits

• Exclusively for multifamily properties
• Loans are nonrecourse, have long-term fixed rates, and up to 30 year amortization

Banks/Credit Unions read more

Banks and Credit Unions are useful for many borrowers. Banks seek to recoup as much of their investment as possible in a timely manner, causing them to offer shorter terms for borrowers who prefer flexibility. These short terms can be useful for investors who plan to sell in 3-5 years, or foresee an event that could impact the value of their property in the next few years.

Bank Profiles

An additional consideration to understand is that depending on the assets of the bank, they are regulated on how large a given loan can be. The closer the loan amount is to their regulated limit, the more likely they will need to find another bank to participate with them.

Understanding Each Bank's Process

We understand each banks' and credit unions' origination and due diligence process and assist clients with negotiation, loan approval and closing.

Advantages

• Prepayment flexibility
• 75%-80% loan-to-value is considered
• Offer ground-up construction loans

CMBS read more

Commercial Mortgage Backed Securities (CMBS) loans are underwritten and funded by a qualified conduit lender, then sold to a trust. CMBS loans offer borrowers the opportunity to lock in rates for extended terms, typically 10 years.

Lending Metrics

CMBS loans are appealing because they can be aggressive on all of the lending metrics: high leverage, long amortization, long-term fixed rates, and non-recourse.

Benefits

• Up to 75% loan-to-value; 80% loan-to-value for multi-family
• Will lend in secondary and tertiary markets

Equity read more

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