I regularly hear a version of the same question from sponsors once a hotel or apartment deal is stabilized: which loan should I actually be using now? This is the permanent financing decision. The assumption underneath it is usually that financing a performing asset should be the easy part. The asset is performing, the income…
LifeCo loans—commercial mortgages issued directly by life insurance companies—are one of the most attractive financing options available for stabilized commercial real estate. In this guide, Randy Efron of Skylatus Property Capital explains what LifeCo loans are, why insurance companies make these loans in the first place, which properties and borrowers qualify, and how LifeCo pricing…
Part 4 of 4 · CMBS Loan Series This article builds directly on the concepts covered in Part 3 of this series, which explains CMBS tranches and rating agencies. We recommend reading that first, since the concepts tie together closely. A B-piece buyer is the bond investor that purchases the riskiest bonds available within a…
Part 3 of 4 · CMBS Loan Series This article builds on Part 2 of this series, which covers CMBS loan rates, reserves, and cash management. We recommend reading that first, since the pricing concepts tie directly into how tranches are structured here. Once a pool of CMBS loans is aggregated, it doesn’t get sold…
Part 2 of 4 · CMBS Loan Series In Part 1 of this series, we covered what a CMBS loan is, its advantages and disadvantages, and how lenders size proceeds using as-is loan-to-value and debt yield. This installment covers CMBS loan rates and the structural elements — reserves, cash management, and assumability — that shape…
Part 1 of 4 · CMBS Loan Series CMBS loans (Commercial Mortgage-Backed Securities loans) finance stabilized commercial real estate — multifamily, hospitality, and other income-producing property types — for sponsors planning to hold for five years or longer. Unlike a conventional bank loan, a CMBS loan is originated, pooled with other loans, and securitized —…