TOP TAKEAWAYS FROM 20TH ANNUAL BARRY SLATT MORTGAGE LENDER’S PANEL AND LUNCHEON
April 19, 2018
Top executives from prominent lenders weighed in on many capital market hot topics at the Barry Slatt Mortgage Company’s 20th Annual Lender’s Panel Luncheon. The event featured speakers from a selection of our correspondent lenders which included Symetra Financial, StanCorp Mortgage Investors, Sun Life Financial, Thrivent Financial, and Barclays. The lender panelists were asked about recent changes to the commercial lending platforms, the impact of technology on their business, and where they think the market is headed in the year to come. Here are some highlights from the panel:
- Our correspondent lenders have a high level of liquidity and are actively looking to allocate those funds over the balance of 2018.
- With interest rates going up, spreads have compressed for the most attractive deals. There remains significant competition among lenders for high-quality low-leverage requests.
- The market for CMBS loans continues to be active and will be an attractive option for those that value 10-year interest only financing or those with properties in secondary and tertiary markets.
- Most lenders increased their allocation and focus in the industrial and multi-family sectors.
- California markets continue to remain attractive as lenders are focusing on making loans in top markets throughout the country that provide the best combination of population density and strong demographics.
- Portfolio lenders continue to invest in commercial mortgages as they have performed well over other asset classes.
- Technology is being leveraged to improve borrow experience and shorten underwriting/closing timelines.
- Despite the continued negative news in the media about retail, more stores opened last year than closed and retail product that has “service related tenancy” and an entertainment experience will continue to attract lender interest. Lenders still have a strong appetite for grocery-anchored shopping centers that have strong credit, sales, and attractive demographics.
- Forward rate locks from 120-180 days are available at a minimal premium.
- With the current flat yield curve, long-term money of 10-20 years is priced very similarly to 5 and 7-year fixed terms. Going long is at a great advantage in today’s market.
- Our panel generally sees inflation staying at 2.5% or less in the near-term future.