Mark Halloran
Director, GRS | Corteq
(732) 450-8960
[email protected]
Though the MBA’s CREF/Multifamily Housing Convention & Expo continues to enjoy strong interest from apartments-focused players, others attending were zeroing in on retail and hospitality as commercial real estate sectors that could draw more lending activity.
That’s among the observations that myself and other team members of GRS Group, who attend the event annually, made during the mid-February event where we meet with current and future clients.
One of those somewhat optimistic on future retail and hotel lending was Gary Bechtel, president of the direct-lending firm Money360, in a video interview with REBusinessOnline.
He contends that both property types can be good bets if certain considerations are put into place by lenders. Bechtel spoke of the importance of being selective when choosing deals in the sectors. In the case of hotels, Money360 is looking at flagship locations, and he stresses the importance of choosing strong owners and operators with which to partner.
When it comes to retail, Bechtel says there is no one specific region of the country where the asset class is performing better than others. Instead, retail is very property-by-property specific as to its performance. Money360 lends in primary, secondary and tertiary markets for retail assets and relies heavily on data before doing investments.
Meanwhile, a CBRE report on MBA’s CREF said the lending environment for multifamily is still “robust,” despite worries about apartment saturation in some areas. The firm said a variety of lenders are interested in the sector, from life companies to smaller banks focused on local deals.
CBRE reported that multifamily loan origination totaled $280 billion last year, with GSEs making up half of that figure. For the rest of the year, the firm said: “We expect the 2018 financing environment to remain competitive yet inefficient with a wide range of quotes for most projects. While liquidity is strong, lenders are selective with various strike zones based on yield and risk tolerances.”
The firm still labeled multifamily as one of the two top property sectors for lenders, involving both transactions and new construction, along with industrial. It also said that CMBS and bridge lenders are particularly interested in suburban office right now, though other lending sources are not as bullish.
The main sticking point that CBRE pointed out was that there might not be enough loan demand, because of decreased transaction volume, to satisfy the appetites of lenders.
About GRS Group:
GRS Group is a leading provider of commercial real estate (“CRE”) services worldwide. With offices across the United States, Europe, and affiliates around the globe, GRS Group provides local market knowledge with a global perspective for institutional real estate investors, occupiers and lenders worldwide. The GRS Group team has evaluated and advised on over $1 trillion in CRE transactions.
Through the company’s proprietary management process, Global Services Connection, GRS Group delivers an integrated suite of services including Financial Advisory, Transaction Management, Assessment and Title Insurance. We provide a single point of contact, capable of leveraging the GRS Group portfolio of companies and delivering customized solutions to assist our clients in achieving their investment goals.