April 9, 2002

Commercial Mortgages & Real Estate Loans:
Spring Update

We are pleased to announce that this newsletter now reaches approximately 1,000 readers every two weeks - most of whom are active participants in the commercial real estate investment arena: either as a direct principal or a loan service provider to those principals. Our primary goal is to provide information and services to commercial mortgage investors to help each of you achieve your investment objectives. Thank you for your support and encouragement and please let us know if we can do anything to make From the Street more useful to you.

That being said - I will be brief and to the point relative to what we're seeing "from the street" today:

Supply & Demand: With all the capital that's been sitting on the sidelines, there's plenty of demand for commercial real estate loans with strong fundamentals and certainly those with upside, but the challenge continues to reside on the supply side of the equation. With a glut of commercial investors chasing deals, it's critical to have a competitive edge in gaining access to deal flow. Having the ability to close quickly or leverage relationships to gain control of the deal are fairly critical to not only identifying mortgage opportunities, but closing on them as well.

Capital Markets: Rates for commercial mortgages are still extremely low! Lenders may be underwriting loans more conservatively, but there is lot of competition for the limited deal flow out on the streets. Life companies are getting extremely aggressive for the few quality large deals that are trading, and loan conduits are forced to wait their turn while the life companies either pass on the deal or use up their annual allocations ahead of schedule. It should also be noted that local and regional banks are regaining some of their market share that was lost when loan conduits were lending aggressively. The point being: there's an excess supply of debt, utilize your commercial mortgage broker (Steelhead Capital) to cover the market and structure the best terms for your loan transaction - therein lies our value-added proposition.

Office Market: Soft and getting softer. For the contrarians in the group, look for some real buying opportunities over the next two years. Some developers will be able to ride out the cycle, but inevitably - some will not.

Industrial Market: The outlook is good. Recovery in the commmercial manufacturing sector should continue to drive this sector as mortgage demand creeps up to supply.

Apartments: Always a favored staple. The challenge is two-fold: 1) lender underwriting, and 2) cap rates. As discussed last time, there's a noticeable gap between the Seller's ask and the Buyer's bid.

Retail: There's a little more supply out there than needed. The current inventory of commercial shopping center space is at an historic high of 10 sf/capita. Obviously, well-located centers with high barriers to entry will prevail over any broad sweeping national statistics that may be published.

For fear of over-stating the obvious - put the "tea leaves" aside and look closely at the fundamentals of each commercial real estate loan transaction. Steelhead Capital will do its part to structure the most competitive commercial mortgage financing terms available - you do your part to buy smart deals and keep everyone else in business.

Read the next commercial mortgages & loans newsletter "From the Street"

Commercial Mortgages & Real Estate Loans Newsletters

About once a month you will receive news regarding commercial mortgages and real estate loans with our newsletter "From The Street." Click here to subscribe and receive your first commercial mortgage issue within just minutes - it's free!

With an extensive lender and commercial mortgages network, Steelhead Capital has built its reputation on structuring commercial mortgages and commercial real estate loans requiring both debt and equity placement. Fluctuations in the capital commercial mortgages present significant challenges for investors and we are pleased to provide financing, as well as, guide and advise its clients through the process of obtaining commercial mortgages. Whether you are looking for apartment financing, commercial financing, commercial mortgages, or creative "out of the box" real estate loan alternatives, we can help.

Our success is measured by our clients' success, and our mission is to be your source for the most appropriate - and advantageous - commercial mortgage solution that helps you achieve your goals. Make Steelhead Capital a part of your commercial mortgage and real estate financing success. We look forward to hearing from you soon regarding our commercial mortgages and real estate financing services.

Call us today toll-free at 888-951-6600 or click here for your confidential and complimentary loan review.