Commercial Loans & Mortgage News - April 9, 2002
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 service provider to those principals. Our primary goal is to provide information and services to commercial 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 real estate 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 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 opportunities, but closing on them as well.
Capital Markets: Rates are still extremely low! Lenders may be underwriting 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 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 conduits were lending aggressively. The point being: there's an excess supply of debt, utilize your mortgage broker (Steelhead Capital) to cover the market and structure the best terms for your 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 manufacturing sector should continue to drive this sector as 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 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 transaction. Steelhead Capital will do its part to structure the most competitive financing terms available - you do your part to buy smart deals and keep everyone else in business.
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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.
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