IRVINE FULL SERVICE MARRIOTT FUNDING
February 11, 2016
February 11, 2016
I am pleased to announce
the funding of a $72,150,000 construction loan which I had the privilege of arranging for the development RD Olson
Development's new Irvine Spectrum Full Service Marriott Hotel. This 271-room full service hotel is to be located
at the corner of Irvine Center Drive and Gateway, right across the street from
the Irvine Spectrum Center. Hotel amenities will include a restaurant, bar and
lounge, 9,000 square feet of meeting and pre-function space, a large event lawn,
expansive pool and spa, state of the art two story 2,000 square foot work-out
facility, and a large roof top terrace. Opening is scheduled for 4th quarter
2017.The Construction financing was arranged through one of Westcap Corp's key
bank relationships.
INCOME PROPERTY FINANCING UPDATE We just returned from the annual Mortgage Banker's Income Property Finance
Conference in Orlando. The mood with all of our lenders and others we met with
was very upbeat, and all have a lot of allocation for 2016. As indicated last
month, early in the year is the best time to get your financing when lenders are
more aggressive, looking to fill their allocations.
Treasury yields have been moving in concert with the price of oil recently, and with the dramatic drop in oil prices, which closed to $27.06/brl this morning after getting down to $26.50/brl this morning, we have seen the 10-year Treasury go from 2.30% a month ago to 1.64% today after dipping to 1.52% this morning. The down spike in oil is causing great global concern while China's economy continues to struggle, causing a ripple effect on its raw material suppliers worldwide. Consensus with the oil experts seems to be that oil prices will remain depressed for some time to come, with a possible increase late this year. Expect mortgage rates to continue to track with the price of oil, begging the question, did the Fed increase the Fed Funds Rate too soon? The following links certainly spell out the global economic concerns in greater detail as of this morning:
http://www.usatoday.com/story/money/markets/2016/02/11/stocks-dow-thursday/80221858/ http://cnnmon.ie/1LiKWmG
We also came back with a couple of very interesting loan programs worth mentioning:
1. More IO and Extended Amortization Life Company Programs: A couple of our correspondent life insurance companies, eager to win some of the business currently being left on the table by CMBS due to their high spreads and uncompetitive rates, are now entertaining longer interest only terms and amortization up to 35 years for commercial and up to 40 years for multifamily, and leverage up to 85% LTV on a select deal by deal basis.
Treasury yields have been moving in concert with the price of oil recently, and with the dramatic drop in oil prices, which closed to $27.06/brl this morning after getting down to $26.50/brl this morning, we have seen the 10-year Treasury go from 2.30% a month ago to 1.64% today after dipping to 1.52% this morning. The down spike in oil is causing great global concern while China's economy continues to struggle, causing a ripple effect on its raw material suppliers worldwide. Consensus with the oil experts seems to be that oil prices will remain depressed for some time to come, with a possible increase late this year. Expect mortgage rates to continue to track with the price of oil, begging the question, did the Fed increase the Fed Funds Rate too soon? The following links certainly spell out the global economic concerns in greater detail as of this morning:
http://www.usatoday.com/story/money/markets/2016/02/11/stocks-dow-thursday/80221858/ http://cnnmon.ie/1LiKWmG
We also came back with a couple of very interesting loan programs worth mentioning:
1. More IO and Extended Amortization Life Company Programs: A couple of our correspondent life insurance companies, eager to win some of the business currently being left on the table by CMBS due to their high spreads and uncompetitive rates, are now entertaining longer interest only terms and amortization up to 35 years for commercial and up to 40 years for multifamily, and leverage up to 85% LTV on a select deal by deal basis.
2. Freddie Mac Small Loan
Program: This $1,000,000 - $5,000,000 program is a compliment to our
large balance Agency programs, and offers fixed and floating rates up to 80%
LTV. The program is designed to be easy to process, low cost and quick, and is
priced inside of JP Morgan Chase and is PAR to WESTCAP. This lender
did $1.5 billion in 2015 and 40% of it was in California. We are direct to this
lender through our Q10 alliance.
Life Company
Rates:
5 Year 10 Year 20 Year
Multifamily 3.25%-3.75% 3.25%-4.00% 3.90%-4.50%
5 Year 10 Year 20 Year
Multifamily 3.25%-3.75% 3.25%-4.00% 3.90%-4.50%
Retail 3.25%-3.90% 3.60%-4.25% 4.00%-5.00%
Office
3.25%-3.90% 3.60%-4.25% 4.00%-5.00%
Industrial
3.25%-3.90% 3.60%-4.25% 4.00%-5.00%
* Many have institutes floors with the huge drop in yields seen recently, and many really are not sure what to quote right now. Ranges are consistent with LTV's, bearing in mind that we are seeing many lenders add floors. We are seeing full leverage life company spreads in the 175-200 range over the 10-year Treasury equating to rates in the high 3's to low 4's today.
CMBS Spreads: CMBS is up against some real challenges with the new banking regulations kicking in, which now require a senior level manager to personally certify the quality of the loans being made for secularization. In addition, CMBS lenders are now being required to retain 5% of each loan they make. The result is higher CMBS spreads, which are currently running in the range of 300-325 over the swap rate. Coupled with swap rates works out to rates for 10-year terms in the range of 4.75% - 5.00%+/- for a full levered CMBS loan.
WHY WESTCAP? WESTCAP is a founding member of Q10 Capital, which was formed in 1988, and is a network of 18 of the largest independent mortgage banking companies in the country with a combined servicing portfolio in excess of $15 Billion. With a proprietary database sharing quotes, lender and equity intelligence we are constantly in a position to insure that we deliver the best sources at any given time for our clients.
* Many have institutes floors with the huge drop in yields seen recently, and many really are not sure what to quote right now. Ranges are consistent with LTV's, bearing in mind that we are seeing many lenders add floors. We are seeing full leverage life company spreads in the 175-200 range over the 10-year Treasury equating to rates in the high 3's to low 4's today.
CMBS Spreads: CMBS is up against some real challenges with the new banking regulations kicking in, which now require a senior level manager to personally certify the quality of the loans being made for secularization. In addition, CMBS lenders are now being required to retain 5% of each loan they make. The result is higher CMBS spreads, which are currently running in the range of 300-325 over the swap rate. Coupled with swap rates works out to rates for 10-year terms in the range of 4.75% - 5.00%+/- for a full levered CMBS loan.
WHY WESTCAP? WESTCAP is a founding member of Q10 Capital, which was formed in 1988, and is a network of 18 of the largest independent mortgage banking companies in the country with a combined servicing portfolio in excess of $15 Billion. With a proprietary database sharing quotes, lender and equity intelligence we are constantly in a position to insure that we deliver the best sources at any given time for our clients.
WESTCAP serves as a
correspondent to 15 life insurance companies, for which we service over $1.5
billion, and other sources of capital in order to meet all of our
client's financing needs. Most of these correspondent relationships date back
over 25 years, including Sun Life of Canada for which we have been the exclusive
correspondent in Southern California for almost 30 years. We are handling
assignments ranging from $1,000,000 to $400,000,000, and represent all sizes of
borrowers including some of the largest developers in Southern
California.
Call for rates on all income property types including hospitality, self-storage, student and senior housing. In addition to our life companies, we have a long list of outstanding long-term relationships with active construction and bridge lenders, CMBS and equity for all product types. We even have a couple of bank sources which offer no prepayment penalty and a few who offer non-recourse. With a few exceptions our permanent lending sources are PAR to us.
Call for rates on all income property types including hospitality, self-storage, student and senior housing. In addition to our life companies, we have a long list of outstanding long-term relationships with active construction and bridge lenders, CMBS and equity for all product types. We even have a couple of bank sources which offer no prepayment penalty and a few who offer non-recourse. With a few exceptions our permanent lending sources are PAR to us.
Steve BridgesExecutive Vice President
WESTCAP CORP
9960 Irvine Center Drive
Irvine, CA 92618
Office: (949) 387-9061 Cell: (949) 235-1540sbridges@westcapcorp.com
https://www.linkedin.com/in/SteveBridges2
WESTCAP CORP
9960 Irvine Center Drive
Irvine, CA 92618
Office: (949) 387-9061 Cell: (949) 235-1540sbridges@westcapcorp.com
https://www.linkedin.com/in/SteveBridges2
www.westcapcorp.com
CA RE Broker: 00465840
CA RE Broker: 00465840
