We have seen fast changing and more liberal criteria for both debt and equity (including some for development) in the last 90 days.  The focus for capital continues to be on both ends of a “barbell”  -  top tier product and location which justifies reasonable pricing and terms OR very discounted distressed assets which make sense to capitalize at a high cost of funds.   

As the market and its players are in flux, we are spending just as much time making qualified introductions to capital for qualified sponsors as on deal specific transactional work:   Bridge, Acquisition, Mezzanine, Debt Preferred, Equity Joint Venture, Equity Structured, Partner Buyouts, Distressed Asset or Notes Acquisitions, Deal Recapitalizations, Partially Completed Construction Projects,  Development Financing.  Cash-Out Refinance, Multifamily Financing Including HUD/FHA

We encourage you to call us to discuss both immediate transactions as well as your pipeline and business plans for the near future so we can align you with the newest and best debt and equity sources that match your needs.   Contact Joseph V. Scorese -   Wealth Alliance Financial Group  -   joe@wealthalliancefinancial.com   –   Call Toll Free at  (855) 630-7728

The delinquency rate on commercial mortgage-backed securities hit a record 9.62% in April, according to a report by Trepp, a firm that tracks commercial real estate and banking data.  Analysts expect that to rise above 10% by year end. On the bright side, that forecast marks a slight improvement over prior estimates that called for defaults to top 12%. 

The bulk of the rising delinquencies are falling squarely on the shoulders of small and regional banks, forcing dozens to close.  Thirteen banks failed in April, with nearly all them heavily exposed to commercial real estate. It’s a familiar pattern that U.S. regulators say they’ve been observing for several months. 

Small to regional banks — defined as banks holding less than $100 billion in assets — have $784 billion in commercial real estate loans on their books, according to the Independent Community Bankers Association of America.  That’s about 71% of the total market.   At the height of the bubble, small-to-midsized banks underwrote more than $200 billion in risky land and construction loans, where the collateral on the loan wasn’t office space but vacant land or incomplete construction sites.

Among the 13 banks shut down last month, commercial real estate loans made up 79% of their non-performing loans, defined as loans in default or close to default. Non-performing residential real estate loans made up only 15% of those loan portfolios.