Yesterday I spent an hour on a conference call with a national lender that is putting their money where there mouth is and has started to actively quote on income producing commercial real estate loans to be aggregated for a pool targeted to be securitized in Summer 2010.
Here are some of my notes on what Non-TALF CMBS will look like:
- targeting stabilized assets in 5 major food groups
- looking to keep things really clean (especially on the first securitization)
- the loans will be primarily non-recourse
- willing to get real creative for deals / sponsors they really like
- been quoting deals from $5+ million
- 5-10 year term
- Amo: 25-30
- Coupon: 6-6.5 for 5-years and 6.25-6.75 for 10-year money
- lender is getting half point fee
- sized to 11-12% debt yield
- major markets with some secondary markets
- non-recourse with some 25% recourse on special situations (large cash-out)
Also have a portfolio product:
- portfolio 9-9.5% debt yield… might go to 9% if 20 year amo
- Portfolio deals over $5mm
- do credit check & litigation checks
- want to understand the sponsor’s global real estate portfolio including debt maturities and cash flows
- serious lenders with a balance sheet plan to retain the B-piece… market feedback is that there is no B-piece buyer support for loans under $10mm
- Do bridge value add on multi-family because they can not compete with the Agencies (Fannie, Freddie & FHA)
- Pre-payment penalty: they think defeasence with be the way it starts with possible yield maintenance option down the road
- How do they work with brokers?: lender charges a half point when working with brokers – no more par loans
- Lock box is likely required on $25mm and above not in the $5-20 mm range
- Will do cash out deals for sponsors they like… if a lot of cash out will ask for partial recourse
- Target initial pool to securitize is $400-500 mm
- Will consider hospitality for clean, low leverage, good history properties