Star News

As 2009 draws to a close it can be said that for many in our industry, the year's end cannot come quickly enough. We saw the credit markets begin to thaw yet many lenders continued to become more conservative in their respective underwriting practices. The year ends with the anticipation that in 2010, new institutional capital sources will enter the market and create competition, thereby bringing coupons down to more affordable levels and in turn allowing borrowers to lock in attractive long-term financing.

Fannie Mae, Freddie Mac, and FHA continued to dominate the apartment finance market throughout 2009; while insurance companies were a consistent source for conservatively leveraged transactions. Some banks and credit unions re-circulated loans already on their books to their current customers while offering debt to new customers but at very low loan-to-values.

We at Penstar would like to wish you and yours a happy, healthy holiday season and may 2010 be a prosperous one. This will be the final edition of StarNews for 2009 with more to come in 2010…

Hot Money
Securitized Lenders Looking for Large Stabilized Transactions

A former shadow of the CMBS market resurfaced last month showing indications of a securitized resurgence. Penstar has identified several lenders seeking to fund larger stabilized office, industrial, anchored retail, and apartment properties nationwide for loans exceeding $25,000,000. Smaller transactions ranging from $15,000,000 to $25,000,000 will be considered on a case-by-case basis. All loans must be reflective of properties in large metropolitan cities and borrowers will be required to demonstrate strong sponsorship. Loans will be underwritten based upon a 1.30% debt coverage ratio; a maximum loan to value of 70%, and are non recourse with the exception of standard carve outs. Pricing for 7 to 10 year money ranges from 7.25% to 7.50%. To discuss, please contact Steven Hamermesh at (818) 883-9609 or Hamer@PenstarAdvisors.com.

Helpful Humor

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

“Football Math Test”

A football coach walked into the locker room before a game, looked over to his star player and said, “I'm not supposed to let you play since you failed math, but we need you in there. So, what I have to do is ask you a math question, and if you get it right, you can play.”

The player agreed, and the coach looked into his eyes intently, asking, “Concentrate hard and tell me the answer to the following equation: What is two plus two?”

The player thought for a moment and responded, hesitating, “4?”

“Did you say 4?!” the coach exclaimed, excited that the player answered correctly.

With that, all the other players on the team began screaming, “Come on coach, give him another chance!”