New commercial loan rates posted today with minor fluctuations, still solid numbers available for qualified deals although the capital market is moving quite slowly in anticipation of changes in valuation throughout 2009. Multifamily loans are the strongest of the property types at this juncture, along with our new distressed asset program, we'll keep you posted.

Source: Wall Street Journal

According to this recent article from WSJ, most major banks haven't disclosed the cap rates they are using.

One chunk of exposure is commercial real estate; banks and thrifts hold about $1.7 trillion of commercial mortgages. A benchmark used to value such assets is the capitalization, or cap, rate. This determines property values on the basis of rental income. Take an investor buying an office building with annual income of $15 million. If they offer $200 million, they are using a 7.5% cap rate, which is derived by dividing income by value. Increasing the cap rate implies a lower value for the building.

Cap rates fluctuate depending on the economy and supply and demand for commercial property. During the last real-estate collapse in the early 1990s, cap rates increased to an average of more than 9%. But at the market's peak in 2007, investors were willing to accept cap rates as low as 4% on prime property, partly on the assumption that rents would keep rising.

As banks conduct their stress tests, one big question is what cap rate they are using to value the properties that back their commercial-property portfolios.

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Source: Motley Fool

According to the latest "Five Stocks Under $10" article on the Motley Fool website, Loopnet may be poised for a comeback:

LoopNet (Nasdaq: LOOP) -- Being the leading online marketplace for commercial real estate is a lot like being crowned King of Cooties these days. Commercial properties may have held up relatively better than residential realty when the market began to falter, but vacant office buildings now stand next to foreclosed condo towers.

The upside for LoopNet is that it has held up reasonably well, financially. It also helps that the company is cash-rich and debt-free. Once commercial real estate prices begin to stabilize -- and we may be closer than the market's worrywarts think -- LoopNet will be the hotbed of activity again.

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Source: CoStar Group

An uptick in both the number and average loan size of new defaults resulted in a one-quarter point climb in March CMBS delinquencies to end the month at 1.53%, and there are significant indicators that point to record climb in defaults in April as well, according to Fitch Ratings.

In recent months, Fitch has observed a notable increase in the rollover rate of loans that move from 30-days to 60-days delinquent. As such, the current 30-day delinquency is reliable measure of loans that could go into default.

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Source: Columbus Dispatch

About four percent of housing complexes that were sold in the U.S. this year for more than $5 million have been converted into apartments, up from less than 1 percent for most of the decade, and no apartments have been resold as condos this year, according to Real Capital Analytics, a New York consulting firm.

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New commercial loan rates posted today with minor fluctuations, still some good numbers available for qualified deals although the capital market is still moving quite slowly. Some indicators show possible improvement later this year, we'll keep you posted.

Given the strain on clients brought about by the current liquidity crisis Steelhead Capital has been searching for solutions to meet our clients' needs in these challenging times.

Steelhead Capital is currently working with multiple groups whose focus is aiding owners and developers in re-capitalizing assets in order to de-leverage or complete business plans. These loan programs are designed to provide flexibility to meet the owners needs and will allow them to survive the immediate crisis in hopes of achieving better long term outcomes for their original equity positions.

Are you under-capitalized? Are your distressed assets over-leveraged? Is refinancing not an option? Is selling your property in today's difficult divestiture market your only option? In today's distressed debt market more and more property owners need alternate solutions for their troubled assets, and Steelhead Capital can help. Find out how »

If you are interested in discussing any of these solutions, please call Matt McLeod,
Vice President of Steelhead Capital, directly at (415) 398-2271.