Commercial Loans & Mortgage News - January 8, 2002
New Year, New Opportunities
Welcome to 2002! It's a new year and with it comes a renewed sense of commitment and focus as the Capital Markets look to deploy their allocations for upcoming quarters. If you've been watching the 10-year Treasury over the last few weeks, you've noticed the only thing consistent has been its inconsistency - with rates vacillating between 5% and 5.30%+. Hopefully, if you were playing the rate game prior to locking, you hit it right, but most borrowers I spoke with were just happy to get deals closed in an extremely volatile lending environment. Currently though, with favorable reports on unemployment, manufacturing and consumer confidence, there appears to be a widely held opinion that the US is, in fact, poised for recovery. That being said - it seems that confidence in US markets extends to Europe and Asia from a commercial lending perspective. This global interest in what the US has to offer opens new borrowing opportunities for those looking for debt financing.
US-based lenders, as you are probably aware, have instituted rate floors in an effort to maintain what they perceive as an acceptable yield on their notes. Although the indices upon which rates are priced have dropped to historical lows, borrowers haven't benefited proportionally to the sharp decline. With the Discount Rate at 1.25%, the 90-day LIBOR at 1.84%, and Prime at 4.75% we should be seeing mortgage rates at 4% and 5% or lower. Yet, banks aren't passing their lower rates on to the borrower, but instead taking advantage of higher margins for themselves. Why are they doing this? Well, primarily because they can. European and Asian interest rates, however, are in line with the true cost of funds. Foreign lenders have capital to invest, with a view that the US still offers extremely attractive market opportunities. Considering Japan's recent and continuing troubles, it's easy to understand their appetite for US-based investments. We're seeing fixed rates coming out of Germany in the 3% to 4% range - that's cheap money, but given the cost of funds across the board, it makes sense. There's a considerable degree of pent-up demand to invest capital in sound markets, and the US is certainly one of the more favored, if not the favored, market for commercial real estate lending.
Steelhead Capital recently gained access to European and Japanese money looking for US-based investments, so please inquire if you have an interest in taking advantage of these lending sources.
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Chief Executive Officer Peter Slaugh founded Steelhead in 1999. In the relatively short period since its inception, Slaugh has built Steelhead into a leading resource for debt and equity placement nationwide. Slaugh is primarily engaged in growing the company and its lender relationships, as well as working on financings.
San Francisco Offices
With an extensive lender network, Steelhead Capital has built its reputation on structuring commercial loans requiring both debt and equity placement. Fluctuations in the capital markets present significant challenges for investors and we are pleased to provide financing as well as guide and advise clients through the process. Whether you are looking for apartment financing, commercial financing, mezzanine financing, or creative "out of the box" real estate loan alternatives, we can help.
For apartment loans below $2 million, we have a small apartment loan program with extremely competitive rates. For apartment loans and commercial mortgage loans above $2 million, we provide direct access to the country's most aggressive lenders. Make Steelhead Capital a part of your commercial real estate financing success. We look forward to hearing from you soon.
Please click here for your confidential and complimentary loan review. Are there more questions that you'd like answered? Contact us online, or call our executive team directly in our new San Francisco office at 888-951-6600.
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