If you missed any of our past webinars/podcasts/short videos, below are links to the recordings.

• Active Lenders In Today’s Market: Click here for the recording
• Identifying & Executing On Value In Today’s Environment: Click here for the recording
• Real Estate Executive Thought Leadership Podcast: Click here for the recording
• Non-Recourse CMBS Loans In the Time of COVID: Click here for the recording
• What is Going on in the Capital Markets? Click here for the recording
• The Changing Landscape of Lending Today: Click here for the recording
• Market Update By Sector: Retail, Multifamily, Office & Industrial: Click here for the recording
• COVID-19 The Macro Economy & CRE: Click here for the recording
• UCLA REAG Interview with Tom Barrack: Click here for the recording
• The Future of Multifamily: U.S. Rental Housing Now and Tomorrow: Click here for the recording
• Economics of COVID-19: Click here for the recording
• Hospitality Industry Thought Leadership: State of the Market: Click here for the recording

George Smith Partners identified an equity provider offering rescue capital for nationwide full-service hospitality and mixed-use assets. With financing starting at $5,000,000 and going to approximately $20,000,000, they can provide Pref Equity and Mezzanine capital with rates starting at 12%. Locations of interest are in strong markets with high barriers to entry and development sites with the potential to build strong hotel assets from the ground up.

All eyes on Washington as positive June data cannot be considered “forward guidance” as July’s numbers will most likely be shaky. Congress reconvenes next Monday for a 3 week session before recessing until Labor Day. Elements of the “final” COVID stimulus bill are taking shape. For example, a 5-year liability shield (2019-2014) for businesses and governments relating to COVID claims, some “targeted” aid to state and local governments and an extension of $600/per week of Federal unemployment benefits that are now set to expire July 31. Note that about 33 million Americans are receiving the Federal unemployment benefits. All of these measures are controversial and contentious. If the unemployment benefit is replaced with a “return to work bonus” from the government, is that putting workers into danger? Ben Bernanke (who knows a thing or two about a financial crisis) strongly urged billions of aid to state and local governments, indicating that there should have been more stimulus to states and cities following the Great Recession.

The Fed is “all in” based on speeches from Fed officials this week. To summarize: “No” on negative interest rates in the U.S. Officials cited, “structural issues”. Possible “Yes” on Yield Curve Control (now being practiced by the Bank of Japan) whereby the Fed buys enough short term treasuries to set a ceiling on the yield. A big “YES” on further asset purchases across the board (Treasuries, Mortgage Backed Securities, and Corporates). There is room for this as the Fed’s balance sheet is actually declining due to lower utilization of its swap lines with foreign banks (a very good sign because that means markets are less stressed). And also, “Yes” to the end of LIBOR remaining on schedule for Jan 1, 2021. Fed Governor Williams issued a robust defense of the replacement index (SOFR) during a speech on Monday to regulators. Stay tuned. By David R. Pascale, Jr. , Senior Vice President at George Smith Partners

Straight to The Point – Bridge Lender Demand Ramping for Multifamily Assets
By: Malcolm Davies and Zack Streit

Bridge lender demand has ramped up notably over the past 60 to 90 days for multifamily assets coming off of construction loans and in lease-up. This has been fueled by government purchase of agency MBS through TALF that began in April and has now driven down agency rates on fixed rate loans to sub 3.00%. In the past four months, we have seen strong multifamily collections (April through July) and continued optimism about the next stimulus bill expected to pass before Labor Day which will extend or continue to supplement unemployment benefits.

Debt funds with access to unlevered or balance sheet capital that was previously on the sidelines have re-emerged in the last 60 days, adding to the supply of available lenders (now estimated at about 50% of pre-COVID levels). Spreads for non-recourse bridge financings have compressed between 450 and 500 basis points over 1 month Libor (equivalent to all in rates of 5.00% to 6.00% given a 100 basis point Libor floor, which has become a standard ask) for leverage levels as high as 80% LTC for Class-A assets in major markets.

While this pricing is still 150 to 200 basis points higher than pre-COVID levels, it is significantly lower than the high single digit “hard money” rates that were prevalent in April and May. 80% LTC financing currently feels like pre-COVID era leverage and has exceeded market expectations. If the trend of increased lender demand continues, expect increased competition to further compress pricing to 400 basis points over Libor or perhaps lower?

If you have an inquiry regarding George Smith Partners’ commercial real estate financing, please contact your GSP representative or Todd August, Chief Operating Officer at (310) 867-2995 or taugust@gspartners.com