Monday, October 5, 2009

Get a life? Insurance that is, for a CRE loan....

What do you think of these thoughts from Chris Vittetoe, now of HFF? (I have done deals with HFF in the past and like the way they work, by the way.)

He tells us 80% of life insurers -- an old, traditional way of getting good size deals done before the CMBS boom -- are in the market. Of course, your LTVs are at 65% but decent rates, and then some aren't really back if you read this sentence: "We just met with one lender that has allocated $30 million for LA County for the rest of the year. That is $30 million for all real estate assets including office, retail and so on." That is one decent sized deal, even in this market.

I'm also not sure that I agree with this conclusion. "A lot of people think we are still in a liquidity crisis but that was never true. There has always been plenty of money available just not at the pricing and leverage that some borrowers want."

At least in my world, I knew a bunch of lenders who were not able to lend money at any price. I suppose if you wanted to do a juice deal with insane, unsupportable rates and terms money was to be had. But almost no one was able to do those deals, of course. And given other things Chris said I think he might agree.

All that said, I think Chris has some really good things to say, especially when he talks about the pride of some developers who do not want to admit their properties have declined in value. And I would agree that the life lenders are really back in the market now in that they are lending at terms where deals work. And that is always good a good thing to hear.

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