Lender Survey

Lender Appetite

  • Lenders continue to be selective; however citing pressure to put money out for strong sponsors with quality real estate
  • Broader appetite for durable cash-flowing assets across all major asset classes
  • Flourishing market for financing note purchases and Discounted Pay-Off (“DPO”)

Lender Underwriting Approach

  • Fundamental real estate analysis is important again; lenders focusing on basis
  • Flight to quality. Lenders focused on underwriting of tenancy, market rents and occupancy statistics, lease rollover and associated costs
  • Debt yield, DSCR and LTV tests reverting to the historic mean

Availability of Debt Capital

  • Over $30 billion of “new capital” (public and private) available to support debt financing market
  • Origination of “CMBS/Non-TALF Securitization” in progress by commercial and investment banks
  • Life Insurance companies continue to be very selective, focusing on high quality assets in primary markets
  • Foreign Banks focused on institutional quality, cash-flowing assets in major markets for “best in class” sponsors
  • Money center banks remain active on smaller loan balances with existing clients on cash flowing assets; banks typically seeking some level of recourse

Source: The Ackman-Ziff Real Estate Group.