4 – 12 – 2012
Smaller local and regional banks are looking to diversify portfolios as stabilized multifamily market competition continues. Small banks are competing with Fannie, Freddie, regional, and national banks for stabilized multifamily product. As a result, yields continue to be driven down for a dwindling product supply as many apartments are locked-up on 10 year loans. More lenders are now looking outside the box, and will consider construction, bridge/reposition, commercial and special purpose assets priced at traditional bank yields. George Smith Partners has identified a local bank willing to lend $1,000,000 to $5,000,000 on stabilized multifamily on a national level. This same capital provider will also fund significant bridge/reposition requests for commercial assets in Southern California. Ground-up construction will require pre-leasing from an investment grade tenant. Non-traditional commercial uses (hospitality, assisted living, etc.) will also be considered. Coupons range from 4.75% to 6.0% based on product type and borrower strength. Non-recourse is available for sub-50% LTV loans on stabilized assets.