Jay Nussbaum
July 12, 2012
Anecdotally
at least, there seem to be a lot of commercial real estate investors,
developers, etc., who finally like where prices are, like the way returns are
penciling out, and are eager to move forward, but haven’t ripped off their
warm-ups and gotten into the game because they don’t know where to access
mortgage financing.
I’m
thinking about this today because I just represented a very aggressive lender
on a nice $5.5M loan secured by a 600-unit apartment building in the Southeast. The buyer was very savvy, and realized that conventional
financing wasn’t going to be available for his deal because the property he was
buying was only 60% leased at the time of acquisition. So instead of wasting his time and losing the
deal—or worse, never going to contract at all out of fear of the mortgage
market—he wisely found a bridge lender that jumped at the deal. Sure, that’s a
more expensive way to go than conventional financing, but it enabled him to buy
the property, and after he turns it around (he estimates 12 to 24 months) he’ll
refinance out into a conventional loan.
Sure
beats sitting around grumbling about the lack of available financing.
