Lender Competition Fuels Borrower-Friendly Market Conditions at What Remain Historically Low Rates and Favorable Terms; Trend Expected to Continue Looking Towards Second Half 2021
San Francisco, Calif. – Gantry, the largest independent commercial mortgage banking firm in the U.S., has completed in excess of $2.1 billion of new commercial placements during the first half of 2021. This total reflects a highly favorable lending environment for borrowers across the spectrum of commercial real estate asset classes.
“So far this year, aggressive policy actions that were implemented to stabilize the economy have resulted in the favorable conditions in the capital markets we see today. This has motivated a broad spectrum of lenders to prioritize commercial mortgage allocations,” said Michael Heagerty, CFO and Principal with Gantry. “The resulting climate has provided the vast majority of commercial real estate owners with a variety of attractive financing options to refinance or acquire properties. Lender competition for quality assets has created a borrower’s market and we continue to see generationally favorable rates and terms that should compel asset owners and investors to actively review their options in the current cycle.”
In terms of capital allocations Gantry’s Q2 2021 originations, were defined by the following (ranked in descending order):
Asset Class: Multifamily, industrial, office, retail, and self-storage.
Loan Volumes: Life companies, banks, and credit unions as top funding sources.
Loan Values: Life companies, agencies, and banks for total loan values.
Notable trends in relevant Gantry verticals include:
Gantry originated a total of 123 unique loans in Q2 and 238 since the beginning of the year. Life company, CMBS and GSE lenders remain extremely active and are often the preferred source for long-term debt while banks and credit unions remain an attractive source for mid-term loan structures. Key trends to consider from Gantry’s first half of 2021 production totals include:
Growing lender interest in essential and exceptional retail assets allocations led to an increase of loan placements for this asset class.
Lender appetite for self-storage product has increased significantly as the asset class has performed very well during the pandemic with expectations that rental increases will follow.
Banks and credit unions remain competitive on rate and proceeds.
Life companies remain the attractive source for longer-term, low-leverage loans.
Several lenders, on the sidelines during the pandemic to sort out their portfolios, jumped back into the market with aggressive pricing to win new business.
Gantry, a long-rated Primary Servicer by Standard & Poor’s, continues to see near 100% of expected performance from its more than $17 billion portfolio of serviced commercial mortgages spanning more than 2,000 loans in 43 states. Further, relief or modification requests from borrowers have diminished substantially as even formally distressed loans return to original performance terms. The company continues to mitigate impacts from problem loans early in the process through quick action from a team of seasoned experts with decades of experience navigating distressed market dynamics. Gantry expects to see a continued trend of asset performance for the foreseeable future due to these efforts.
Gantry has continued to successfully operate in post-COVID work-from-home model and is now charting a return to in-office operations for all offices. This move includes the opening of a new and expanded dedicated production office in Portland, Ore. reflecting the firm’s growth of its Pacific Northwest production team last year. As the largest independent commercial real estate banking firm in the United States and a leading member of the Strategic Alliance Mortgage (SAM) network, Gantry plans to continue growing its production team in 2021 in existing and new markets.