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.

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

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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

For Close to two years, commercial real estate lenders have put off dealing with distressed loans. Although retail sales are on the rise, the amount of distressed owners in retail properties continues to grow. Until now, banks have spent most of their time resolving residential and construction loans. This year, they are turning their attention towards retail and office loans. Since this time last year, the amount of retail properties on bank balance sheets has more than quadrupled. The number of distressed properties has more than tripled. This is where Remington’s recapitalization program comes in.

The majority of institutional equity that has been raised over the last 3 years, was to purchase distressed notes. These distressed notes are made up of  a combination of preforming and non-preforming assets. Unfortunately, for the large private equity funds the number distressed notes hitting the open market is minimal compared to their initial expectation. The major reason, banks have continued to “extend & pretend” the current notes as long as they are cash-flowing assets and can service the debt. For the properties that banks won’t negotiate on, the only option is to recapitalize or be forced in to foreclosure. Remington’s Distressed Property Recapitalization Program (DPR) is the best option for property owners that are in this situation. With this program, we can work with our over 500 capital relationship to bring all parts of the capital stack to the table and find a viable solution.

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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I’m extremely confident in the individuals that work together to make up our Capital Markets Group here at Remington. In this challenging marketplace experience, work ethic, and relationships are the only things that separate you from the rest. It is our dedicated effort here at Remington to do everything in our power to make your project a successful one.  To read more about our Capital Markets Group, please click the link below.

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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