For Real Estate Professionals Seeking a Market Edge
Default on Apartment Loans Set Records for U.S Banks
Defaults on apartment-building mortgages held by U.S. banks climbed to a record 4.6% in the first quarter 2010, nearly double that of the same period last year, as more borrowers failed to repay debt that was obtained at the time of the market peak. Defaults on mortgages for multifamily properties rose in the first quarter, up 2.4% versus the same period in 2009; and defaults on mortgage loans against commercial assets such as office, retail, hotel, and industrial properties likewise demonstrated an increase of 4.2% in the first quarter.
Throughout the past 2-year period, the global recession reduced demand for U.S. apartments, office space, retail, hotels, and warehouses as jobs disappeared and as consumers continue to cut spending. For the past 3 consecutive quarters, the rate of default on mortgages against apartment buildings surpassed the previous record, set in 1993. During that time, the [U.S.] savings and loan crisis drove such mortgages to 3.4%, while defaults in mortgages against other types of commercial property peaked at 4.6% in 1992.
Forecasts for 2010 apartment building vacancies are expected to peak as high as 8.2%, the highest level in more than 2 decades; however, experts believe that as the U.S. economy slowly adds jobs, vacancy rates will decline in 2011; and financing on apartment buildings may lead to a gradual rebound in the commercial real estate market while the economy begins a slow but steady rebound.
We will keep you posted…
Lender Seeking To Acquire Performing Loan Portfolios at Par
Penstar is currently working with a lender seeking to purchase $750 million in loans on office, industrial, and retail properties throughout the United States; and are specifically seeking acquisition of portfolios of performing loans ranging from $20 million to $100 million. Such properties will be in major metropolitan areas, reflect strong leases, and carry yield maintenance or defeasance call protection; with a maximum 60% loan to value based on today's capitalization rates. The lender will acquire these mortgages at Par.
This capital provider is also originating 10-year fixed rate financing at the highly competitive rate of 5.75$ on actively leased commercial properties ranging from $1.5 million to $25 million located throughout the United States. To learn more, 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
“Good Trade, Bob!”
As a man walks down the street carrying an ice cold case of beer, a friend passes by and asks,
“Afternoon, Bob. What's with the cold brew?” |
30
Day Libor |
10-Year
Treasury |
Prime |
0.35% |
3.19% |
3.25% |
Penstar Realty Advisors can be reached at (818) 883-9609.