Astonishing Loans from Last Week: RIDA & Ares $620M, Related Companies $380M, Tishman Speyer $301M

Good Morning Everyone

This week in Deals:

$2.21 billion in top 10 CRE deals

Top CRE Lenders
Wells Fargo, Bank of America, Deutsche Bank, Starwood Property Trust, Nuveen Green Capital, Ares Management, Monarch Alternative Capital, BridgeCity Capital, Northmarq, Northwind Group, Pacific Life Insurance Company, and CPP Investment Board.

🌆Top Weekly CRE Deals

• Wells Fargo, BofA, Deutsche Bank provide $620M loan for $1B Hyatt Orlando deal Read

• Related Companies lands $380M CMBS refi for Bronx Terminal Market Read

• Starwood provides $301M refi on Brooklyn office & Macy’s building Read

• Wells Fargo leads $240M construction financing for Onni apartment tower in L.A. Read

• Nuveen Green Capital supplies $190M C-PACE loan on Virgin Hotels Las Vegas Read

• PMG and Greybrook secure $178M refi on South Florida co-living dev Read

• BridgeCity supplies $87M construction loan for Murray Hill apartments Read

• Northwind Group lends $75M on office-to-resi conversion of former Pfizer HQ Read

• Northmarq provides $75M refinance for Omaha luxury multifamily property Read

• Pacific Life lends $73M to build FSU student housing in Tallahassee Read

Summary

Financing activity remains robust across various asset classes, with lenders demonstrating flexibility in loan structures to meet borrowers' needs. Notable transactions include a $620 million acquisition financing for the Hyatt Regency Orlando, featuring a five-year, floating-rate CMBS loan from a consortium of central banks. Related Companies secured a $380 million, five-year CMBS refinance in New York City for Bronx Terminal Market, while Tishman Speyer obtained a $301 million refinancing for The Wheeler in Brooklyn. These large-scale deals highlight the continued appetite for prime assets in major markets.

More minor but significant transactions include a $75.5 million, 8-year, full-term, interest-only loan for a multifamily property in Omaha and a $73.3 million construction loan for student housing at Florida State University. The diversity in loan terms, from floating-rate structures to fixed-rate options, and the involvement of various lender types, including life insurance companies, banks, and alternative lenders, underscore the liquidity available in the market. Notably, C-PACE financing is gaining traction, as evidenced by the $190 million C-PACE loan for Virgin Hotels Las Vegas, marking the most significant transaction in Nevada.

Winners

• Real estate developers and investors with strong track records focusing on high-quality assets in prime locations

• Commercial real estate brokers and investment bankers

• CMBS lenders focusing on high-quality assets in prime locations

• Specialized lenders offering C-PACE financing, particularly for energy-efficient upgrades

Losers

• Small business owners seeking financing for commercial real estate purchases (and should explore alternative financing options like SBA loans)

• Real estate appraisers might also face challenges in this market, particularly when valuing office properties (and should focus on developing more sophisticated models that account for the evolving nature of office use)

• Traditional bank lenders focusing on smaller commercial real estate loans (and should focus on developing niche expertise in specific property types or local markets)

• Lenders specializing in office properties (and should mitigate risk by diversifying their portfolios into other property types, such as multifamily or industrial)

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Tips For Borrowers

1. Consider C-PACE financing for energy-efficient upgrades, as it can offer attractive terms and potential cost savings.

2. Explore full-term interest-only options for stabilized assets to maximize cash flow.

3. For large-scale acquisitions, consider syndicated loans from multiple lenders to secure higher loan amounts.

4. Investigate opportunity zone benefits for eligible projects to enhance returns potentially.

💡Deal Qualifiers:
Here are a few key benchmarks. Loan-to-value ratios on these deals seem relatively high, so I'd aim for 60-70% LTV as a starting point. I'd also look at debt service coverage ratios, targeting at least 1.25x but preferably 1.5x or higher. This ensures the property's cash flow comfortably covers debt payments. For hospitality assets, RevPAR (Revenue Per Available Room) would be crucial - I'd want to see numbers approaching or exceeding pre-pandemic levels. I'd look for properties with consistent NOI growth of 2-3% annually, adjusting for market conditions and property type. For multifamily, I'd target 90%+ occupancy. For office and retail, given current market challenges, I might accept 80-85% if the tenant mix is strong. Finally, I'd focus on tenant quality and lease terms for retail assets, looking for credit-worthy tenants with long-term commitments.

Financing & Referral Opportunities for Brokers & Lenders:
1) Las Vegas, NV: Energy efficiency consultants, Solar panel installers, and Smart building tech companies
2) Tallahassee, FL: Furniture rental companies, Campus shuttle services, and Food delivery startups
3) Brooklyn, NY: Co-working space operators, Office design firms, and Commercial cleaning companies
4) Orlando, FL: Tour operators, Event planning companies, and Local attraction developers

😲Didn’t see that one coming

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• Elon Musk foreclosing on film legend’s family he vowed to help Read

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