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RISING RATES?

Boston

March 22, 2012 Bisnow

Fed chairman Ben Bernanke may say interest rates won't rise ' til 2014. But Centerline Capital Group's Paul Donahue, managing director for the multifamily finance, investment, and management company's new Boston office, says don't bet on it. (Even though we're sure you could coax Vegas into giving you decent odds.)

In Paul?s opinion, Bernanke?s declaration includes an unstated caveat: rates could rise if the overall economy cranks up substantially. Indeed, Paul says rates may start to rise sometime this year. As a result, he's ?wrestling? with clients to move on refis now. (Hulk Hogan's new move: The Refi Slam.) Furthermore, he says, the fear that a tsunami of failing CMBS loans will swamp the market in '13 and ?14 may never materialize. In recent months, the breadth of capital markets to support real estate has been improving. If the overall economy keeps strengthening, Paul says that worries about CMBS paper reaching maturity in the next year or two may recede.

Riemer & Braunstein?s Doug Clarke and Bentall Kennedy?s Ryan McDonough and a few other friends recently dropped by Centerline?s new crib on Franklin Street to sip ?n dip. Paul says that as part of the company's latest expansion push, it bolstered staff here, Atlanta, and Dallas. Paul says that Centerline Capital, which services an $11.4B multifamily mortgage portfolio, likes Boston because it's perhaps the least volatile US market. That reflects the stability of the area's major industries: education, healthcare, and financial services. The biggest complaint Paul gets about Boston deals is that there aren't enough properties available in any asset class.

Centerline VP Hayley Suminski works on lending in Boston with Paul. They're working with a New York-based client to secure permanent financing for a new rental apartment building they have under construction in Lowell. Paul is also advising a Boston-based developer with an affordable housing complex in Philly on a refi. For another client who owns an affordable housing property in southern New Hampshire, Paul tells us that he's investigating the possibility of doing a new low-income housing tax credit syndication following a property renovation. He's also securing construction financing for a Boston developer doing a deal in downtown Atlanta.

Related Topics: Hunt Mortgage Group, Franklin Street, New Hampshire, Ben Bernanke, Paul Donahue, Ryan McDonough

RISING RATES?

Don't Forget!