Star News

Increased frustration with lenders has forced many borrowers to adjust their expectations for obtaining real estate loans in today's turbulent market. As the pendulum has swung from being a borrower’s market to a lender's market, lenders are asking for evidence of significant documentation such as personal financial statements, tax returns, and schedules of real estate, prior to any expression of interest or term sheets. Lenders will no longer accept brief descriptions of net worth and liquidity in order to provide written loan quotes.

The New Year has opened with insurance companies, banks, and credit unions willing to lend on quality stabilized properties. While the terms have become more conservative, historically today's money is still available at up to 65& loan- to-value, a 6% to 7% fixed rate of interest and with a 25 to 30-year amortization, respectively. There is an estimated $300 billion of debt that will be coming due in 2009, most of it from non-portfolio CMBS lenders. We will keep you posted…

Penstar has entered into application on an apartment complex located in South West. The 48-unit property was 70% complete when the construction lender was taken over by the FDIC. The borrower was forced to seek an alternative lender to complete the project. Penstar brought in another construction lender who will provide the funds to both pay off the existing lender and complete the property. The loan was the lesser of 80% of costs or 75% of appraised value and priced at 2% above Prime with a floor rate of 7%. To discuss, please contact David Stepanchak at (818) 883-9611 or DStep@PenstarAdvisors.com.

Penstar is currently working with a lender who will loan on office, industrial, and retail properties located in towns throughout the United States whose populations are below 50,000. Loans considered will range from $1 million to $20 million, with a 5,year term, at a fixed interest rate of 6.5%, and a 25-year amortization. The loans are non-recourse to the borrower, with the exception of standard “bad boy” carve-outs. Maximum loan to value is 60%. To discuss, please contact Steven Hamermesh at (818) 883-9609 or Hamer@PenstarAdvisors.com.

Helpful Humor

We at Penstar understand the challenges of the commercial real estate business. The best antidote for those challenging transactions is to take a moment to have a hearty laugh. Helpful humor is our way of infusing laughter into your work week. The anecdotes may not all be real estate themed but we hope you will enjoy them just the same.

“Better Relationship”

A man walked into a therapist's office looking very depressed. “Doc,” he pleaded, “you've got to help me. I can't go on like this.” I'm 35 years old and I still have no luck with the ladies. No matter how hard I try, I just seem to scare them away.”

“My friend, this is not a serious problem,” the doctor assured him. “You just need to work on your self-esteem. Each morning, I want you to get up and run to the bathroom mirror. Tell yourself that you are a good person, a fun person, and an attractive person; but say it with real conviction. Within a week you'll have women buzzing all around you.”

The man seemed content with this advice and walked out of the office a bit excited. Three weeks later he returned with the same downtrodden expression on his face. “Did my advice not work?” asked the doctor.

“It worked all right. For the past several weeks I've enjoyed some of the best moments in my life with the most fabulous looking women.”

“So, what's your problem?” asked the doctor, puzzled.

“I don't have a problem,” the man replied, “my wife does.”