Why You Should Seek Debt Now

CMBS, life companies, and Fannie Mae--oh my! Lenders expect to increase their funding volumes this year between 15% to 65%. Even with rates slightly increasing, it's a great time to be seeking debt, says BMC Capital prez and CEO Keith Van Arsdale.

CMBS lenders are projecting 2013 volumes between $60B to $75B, Keith tells us, up from last year's$45B to $50B.CMBS lenders have also indicated we could see LTVs up to 80%, 10-year interest-only, and debt yields as low as 8.25%. (Keith remains skeptical, though, wondering how much of this will actually come to fruition.) Life companies continue to bea steady player, with most indicating funding volumeswill increase 5% to 15%.And Fannie Mae lenders will continue to play a major role in multifamily financing.Keith's prediction: Look for many Fannie Mae lenders to aggressively grow their bridge loan programs, and be on the lookout for new players to enter the marketthis year.

At the recent MBA convention in San Diego, Keith met with reps from a $3B bank that plans to fund $500M of CRE loans over the next 12 months. He also sees several new capital sources offering bridge loans with rates in the 6% to 7% range, 75% LTV-LTC, recourse or non-recourse.His conclusion: In general, underwriting will continue to be based upon historical operating results and DCRs in the 1.25x range. His latest deal: a $3.1M multifamily refi loan for a Dallas property through an agency correspondent, with LTV at 75% and 4.58% interest (10-year fixed-rate, 30-yearamortization, and non-recourse).