The Barry Slatt Mortgage Company makes a market for our clients. Our reputation, built over more than forty years in business, is one of expertise, trust, and straightforward communication. We are a mortgage banker that has proprietary relationships with several of the most prestigious lenders nationwide. We do not originate mortgages simply by referencing rate sheets, we do the heavy-lifting required to connect you with lenders that can provide a custom-tailored solution for your needs.

We are having a tremendous year, and would like to share the same unique market analysis and timely company news that helped us triple the size of our servicing portfolio over the past 5 years; currently totaling more than $2.3 Billion.

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Commercial lending market is strong despite mixed messages from the FOMC
 
Many investors were left scratching their heads following the FOMC meeting early this month. The Fed took an unexpected stance by stating that they do not expect to raise rates until at least 2014, far later than previous projections pegged the timing. In fact, according to RBC Wealth Management’s weekly insight, there was a report released later in the day that showed nearly two-thirds of the FOMC members advocate raising rates prior to the end of 2014. While the inconsistencies have caused confusion for industry professionals, one thing is clear—there are some seriously mixed messages coming from Washington.
 
Even with the uncertainty with regard to rising interest rates, the commercial finance market continues to strengthen its foothold. In addition to the widespread allocation increases for the Life Insurance Companies we discussed in our last update, the CMBS market has also enjoyed positive growth. Although levels are still a fraction of what they were prior to 2008, we have seen a large amount of commercial mortgage backed paper come into the market. According to Commercial Mortgage Alert there is an estimated $10.8B in total transactions scheduled to hit the MBS market by April. The projected first quarter pipeline of $9.2 billion would put the US on pace for $37 billion of annual volume. If the performance of these securitizations continues to price within or tighter than the expected ranges, we could see a significant increase in overall production from the conduit lenders.
 
As a result of the resurgence in securitization activity, the overall rates for CMBS origination have tightened dramatically over the past 90 days. We have seen almost a 100-basis point decrease in rates for moderate to high leverage requirements. There is a strong appetite from many of the CMBS shops, and it is clear that the larger and more conservative your transaction, the more in line with Life Insurance Company lenders' pricing will be.
 
The good news is that the CMBS market has returned to a level where it is providing a competitive alternative for many investors. The even better news however is that with the increased competition Life Insurance Companies are now on notice that there are alternatives in the market.  Life Insurance lenders are still extremely competitive in their space, and for investors looking to lock up long term fixed rate financing for 10-20 years, we are seeing rates starting in the mid to high 3% range for larger conservative requirements. For smaller and moderate leverage transactions, rates are typically in the low-mid 4% to low 5% range.
 
Until there are other higher yielding investment vehicles for Life Companies to invest in, commercial real estate mortgages will continue to be the place they cast their nets in search for yield.
 
We will continue to monitor the market and update our readers about the volatility in the marketplace, but from where we sit today, the opportunity to lock in long term fixed rate financing has never been better.

We would like to introduce the first installment of a new series highlighting our correspondent life insurance companies and their lending programs. Every other week we will feature a different lender’s program, and share updates on how best to capitalize on each organization's agenda.
 
Today’s lender is focused on origination in the major metro areas of the San Francisco Bay Area and Los Angeles County. They are seeking to place low to moderate leverage, non-recourse financing secured by multi-tenant retail, Office and Industrial property. Loan sizes range from $2,000,000 - $15,000,000.
 
Interest rates are very competitive for all fixed rate options. The lender can provide 10, 15 and 20 year fixed rate financing. 10-year rates are from 4.00% - 4.25%; 15-year rates are from 4.25% - 4.50% and 20-year rates are from 4.50% - 5.00% depending on size, deal quality and leverage.
 
This correspondent lender prefers longer term, but has the flexibility to be creative on prepayment structure, allowing borrowers to take advantage of low long term rates while still maintaining flexibility. Amortizations typically are up to 25 years.
 
Additionally this lender has a construction to permanent financing program. Deals should be pre-leased and well located in order to qualify for this program. Loan to cost is subject to the particular transaction, but in general, the lender will be conservative in their approach.

Contact your local Barry Slatt Mortgage office to learn more about our Correspondent, and how we can help you realize your goals.