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Writer's pictureTony Kaufmann

CMBA 2024: Key Takeaways

Life Company Lenders
  • 3yr – 30yr fixed rate options with IO available and varying prepay flex structures.

  • Max LTV constrained by achieving at least a 1.30x DSCR on a 30yr am, except for deals with significant upside to rents.

  • 3yr fixed rate bridge and floating rate bridge offered for multifamily, industrial & retail.

  • Construction and construction to perm for multifamily, industrial, and grocery-anchored retail.


Life Co perm spreads for loans greater than $10MM (over corresponding UST):

Industrial (Distribution/Logistics)

1.35% - 1.90%

Single-tenant Retail

2.40% - 2.75%

Flex/Light Industrial

1.65% - 2.10%

Self-storage

1.65% - 2.10%

Grocery or IG Credit-anchored Retail

1.35% - 1.90%

Office

2.75% - 3.25%

Strip/Shadow-anchored Retail

1.90% - 2.50%

Multifamily

1.20% - 1.80%

Big Box Retail

2.20% - 2.50%

MHC

1.65% - 2.10%

Debt Funds
  • Debt funds are winning bridge and construction business from banks due to their strong lending appetite and availability of no-strings-attached liquidity.

  • 18–36-month terms with extensions.

Multifamily

2.25% - 3.25%

Grocery or IG Credit-anchored Retail

3.00% - 4.25%

Industrial

2.50% - 3.75%

Other Retail

3.75% - 5.00%

Self-Storage

3.25% - 4.75%

Office

5.50%+

Banks & Credit Unions
  • Banks are generally risk-off on real estate lending and mostly focused on deposits.

  • Most banks exclusively offer floating-rate debt to mitigate fixed rate balance sheet risk.

  • Banks are still not competing on perm debt. The lowest perm bank spread starts at 2.25% over USTs

    or Swaps

  • Banks are competitive on floating rate construction and bridge debt in exchange for a sizeable deposit

    relationship. The best pricing starts at SOFR+2.00%.

  • Credit Unions remain active with a wide range of spreads between 2.50% - 3.50% over the corresponding UST.


CMBS
  • CMBS’ rate buy-down features are being used as a tool to enhance loan proceeds on rolling bridge loan

    originated in 2021-2022.

  • Spreads have widened in recent weeks and generally remain greater than 2.50% over USTs (or Swaps) unless a rate buy-down is purchased by borrower.

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