By Rich Davidson, Senior Vice President In every industry, every team, and every project, there comes a moment when someone says, “That can’t be done.” It’s a phrase that halts momentum, stifles creativity, and quietly reinforces the status quo. But…
By Matt Mueller, Vice President In a world where commercial real estate (CRE) deals grow more complex by the day, success is increasingly won or lost in the details. The heartbeat of CRE mortgage banking is data—nuanced, timely, and expertly…
By Maura Hudson, Chief Marketing Officer The Slatt Capital Lender Sentiment Survey is a study designed to gauge lender perspectives on key market trends and expectations within commercial real estate finance. Sent to a wide spectrum of lender types, the…
by Cody Charfauros, Principal and Managing Director The last 60 days have seen permanent loan spreads across banks, life companies, and CMBS lenders stabilize near record lows with little additional compression, while U.S. Treasury–indexed interest rates have fallen in lockstep with the market’s expectations for interest-rate…
Analyzing expense reimbursements is essential for managing the financial success of retail, industrial, and office properties. These reimbursements significantly impact operations and planning because they influence budget allocation and tenant satisfaction, which makes it essential to have a clear understanding…
Commercial real estate bridge loans serve as a valuable financing option for investors by bridging the gap between immediate capital needs and long-term financing solutions. These types of loans are typically utilized in commercial real estate transactions where quick access…
When it comes to investing in commercial real estate, understanding the value of a property goes much further than simply comparing property costs in the area. Instead, investors must carefully consider the cost of a property in contrast to the…
The process of gradually reducing or paying off a debt or loan through scheduled, periodic payments over a specified period of time. It involves the systematic repayment of both the principal amount borrowed and the accrued interest charges.
It’s important to note that the specific terms and conditions of an amortizing loan, including interest rates, payment frequency, and any prepayment penalties, are outlined in the loan agreement. Borrowers should review these terms carefully and consult with lenders or financial professionals to fully understand the implications of the amortization process.
The capitalization rate, commonly referred to as the CAP rate, is a key metric used to assess the potential return on investment for an income-producing property. It provides a measure of the property’s net operating income (NOI) relative to its purchase price or value.
The CAP rate is expressed as a percentage and is calculated by dividing the property’s net operating income by its current market value or purchase price.
The formula for calculating the CAP rate is as follows:
CAP Rate = Net Operating Income / Property Value
Net Operating Income (NOI) is a key measure that shows the income a property generates after subtracting operating expenses but before financing costs and taxes. It helps determine a property’s profitability and cash flow potential. Lenders use NOI to assess a property’s loan eligibility. A higher NOI means a more financially stable property, increasing the chances of favorable financing terms. Investors and lenders rely on NOI to make informed decisions in commercial real estate and mortgage lending.
The Treasury Rate is the interest rate on U.S. government bonds. It acts as a benchmark for commercial real estate loans. Mortgage lenders use the Treasury Rate as a reference point to set interest rates. When the Treasury Rate goes up, it means borrowing costs increase, and borrowers may face higher rates for commercial real estate loans.
