Randy Efron walks through the September Fed rate hike and what it means for hotel and multifamily debt. What this article covers The Fed rate hike, and what happened next Where 3.75% to 4.00% sits in history Why the Fed raised now, and how a hike is supposed to work How much weight to put…
Before a lender or equity investor ever quotes your ground-up BTR deal, they run their own diligence checklist on it. Absorption comps, entitlement status, construction cost basis, sponsor track record, all of it gets checked, whether you’ve prepared for that scrutiny or not. The sponsors who raise capital efficiently are the ones who’ve already answered…
In commercial real estate, sponsors often need to decide between a bridge loan and a permanent loan. While both are used to finance income-producing properties, they serve very different purposes. A bridge loan is designed for transitional situations such as acquisitions, renovations, lease-up, or repositioning. A permanent loan is designed for stabilized assets that already…
Hard money loans are short-term, asset-based financing for commercial, multifamily, and hospitality real estate — similar to bridge loans, but with higher interest rates and much faster closings. Randy Efron of Skylatus Property Capital explains what makes hard money different, who actually provides this capital, and why it’s typically viewed as a loan of last…
Commercial real estate financing generally starts with two broad sources of capital: debt and equity. From there, sponsors can use different loan categories and structured capital products to acquire, renovate, develop, or stabilize a property. When an investor or developer starts a new commercial real estate project, capital is required to acquire the property and…
In construction financing, the difference between a recourse and non-recourse loan can have major implications for a borrower’s personal liability. The issue is not only whether the property secures the debt, but whether the lender can pursue the borrower’s personal assets if the loan is not repaid. Randy Efron of Skylatus Property Capital explains that…
A mini perm loan gives a borrower more time after construction is completed before the construction financing must be repaid or refinanced. For developers, that extra time can be critical because a newly built property may still need time to stabilize. Construction loans are typically structured in one of two ways: with a mini-perm component…
Commercial construction loans are used to finance new real estate development projects. They may also help fund land acquisition as part of the construction process, depending on the project, lender, and capital structure. Construction financing is different from stabilized property financing because the lender is not simply underwriting an existing income-producing asset. The lender is…
Commercial bridge lenders often size loan proceeds using more than one metric. One of the most important is as-stabilized debt yield, which helps the lender test whether the property’s future stabilized cash flow will be strong enough relative to the loan amount to support a refinance exit. Because bridge loans are usually intended as short-term…
Commercial bridge loan proceeds are not usually sized only from a property’s current income or current value. Because bridge loans are intended as short-term financing for transitional real estate, lenders often underwrite the deal based on where the asset is expected to be after the sponsor executes the business plan. That is why bridge lenders…
Commercial bridge loan rates are usually based on a floating-rate structure rather than a single fixed coupon. In most cases, the total borrowing cost is made up of three main components: a benchmark index, a lender spread, and in some cases a servicing fee. Understanding how these components work is important because bridge financing is…
Commercial bridge loans are short-term loans used to finance commercial real estate that has not yet reached stabilization. They are often used for multifamily, hospitality, office, industrial, and other assets that need time to improve occupancy, complete renovations, execute a rebranding, replace tenants, or otherwise carry out a business plan before qualifying for lower-cost long-term…