Remington Capital – Joel A. Nathanson

I have observed that some clients get turned down for financing despite having very sound business plans. The reason that the requests are turned down often is as a result of a poorly prepared request. At remington we pride ourselves on creating financing requests that are presented in their most favorable light. Our industry experience has trained us to focus on the issues that our capital sources are most interested in.

There is a high rate of balloon risk maturities happening in the next few years. By 2013 the number of maturities will be more than ten times the number this year. With vacancies up, multifamily lenders particularly will be hit hard. Experts predict that this effect on the multifamily industry could last through the decade. Read More Here.

Wells Fargo & Co. and LNR Property confirm that they are each looking to sell some $1 billion of distressed commercial property loans and assets.

Read More Here.

Remington aims to combat this massive sell-off trend by offering Distressed Owner Recapitalization programs.

If you have a commercial project, I would like the opportunity to take a look at it.

Joel Nathanson
Senior Executive

I have found that as important as our access to capital is to our success that our ability to properly structure the capital stack can be just as important in getting transactions funded. Our capital structuring group is second to none. People often ask me how do we manage to arrange financing when others have failed. My response is simple. Deals fail for three reasons. 1) the deal is just a bad deal. numbers don’t make sense. We can’t fix these deals 2)good deal but poorly presented. We can fix that. Our expert capital restructuring group can present the deal in a way that a capital source will be able to see the merits . 3)good deal but poor access to capital- we can fix that. Our capital markets group has access to over 500 sources.

In today’s challenging credit markets it’s important to have a strong capital markets division sourcing your capital. With both institutional and private investors still leary when deploying new money, its important to understand each investors specific investment strategy and guidelines. Here at Remington, our capital markets group works closely with over 500 capital sources up and down the capital stack. Having multiple capital sources available for any particular transaction is crucial because its not uncommon to have to present a deal to 15 or 20 capital sources before one ultimately says “yes”.

It’s no surprise the medical office sector will be the forth front for new construction projects that are obtaining financing. Both debt and equity players are lining up to capitalize on the increase in demand for this property type. It is predicted that an additional 32 million Americans will now be covered by the Affordable Care Act that that was passed in to law, and the current industry won’t be able to handle the influx of demand.

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I think everyone from main-street to wall-street are starting to see signs that the recession is easing. In the commercial sector, your seeing money that was sitting on the sidelines through 09′, beginning to be deployed. This is a clear indicator that investors feel property values have bottomed out, stabilized, and will begin the upward trend. Still, the biggest issue facing commercial real estate is the $1.4 Trillion dollars that will be coming due in the next 3 years that will have to be refinanced. Unfortunately neither main-street or wall-street have figured out a viable solution for this.

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It’s not surprising the Arizona real estate market is one of the hardest hit markets across the county. The aggressive expansion and over building has put a substantial amount of product on the market. This can be seen on both the commercial and residential sectors. So people are asking, when will property values stabilize, how much product is on the market, when will the credit markets recover? In my opinion, it will take 2-3 years for the surplus of product on the market to be fully absorbed. This makes 2010 – 2012 a great time to purchase real estate!

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In my Remington newsletter this week I noted the availability from Remington of new construction loans. The positive news about the manufacturing sector brings hope that construction will increase, too.

Borrowers often require follon-financing when a construction loan comes due, and so lenders sometimes offer construction-to-permanent loan programs that provide construction loans during the building phase and longer-term fixed-rate financing that kicks in upon issuance of the certificate of occupancy. This two-in-one loan process tends to be more convenient and less costly for borrowers in that there is only one loan application and one closing, with associated fees, instead of two.

Because of the complexity of construction loan financing, borrowers may find it difficult to compare construction-to-permanent loan financing with the two-loan process. That’s where I can help.

The market-focused expertise of our Structured Finance Group at Remington and our Capital Markets Group with its global network of public and private capital sources takes the guess work out of construction lending. Our commercial real estate clients are able to more often secure the best possible rates and terms consistent with their objectives and market conditions at the time.

Please call me if you’re in the market for a construction loan – we can make your next project a success.

Thank you – Joel Nathanson, Remington

Banks and commercial lenders will continue the deleveraging trend throughout 2010. The trend is starting to be seen in secondary and tertiary markets hardest hit with increasing vacancies and decreased cash-flow.

The CMBS market shows a 4.5% default rate on their entire portfolio, with lodging at 11%, and multifamily at 7%. CMBS  transactions that are in risk of default are being turned over to special servicers to ultimately make a decision to either do a work-out or foreclose and auction off assets. The CMBS transactions will be the hardest to recapitalize due to the amount of red tape that borrowers will need to go through.

The good news is that Remington has funds that are being deployed to recapitalize these types of transactions. Please give me a call and let’s discuss.  In addition to our expert advisory services, we are your best access to commercial capital.

Thank you – Joel Nathanson, Remington