Nick Timiraos on what real estate investors need to know about inflation and Fed communication

Nick Timiraos is the chief economics correspondent for The Wall Street Journal. Responsible for covering the Federal Reserve, Timiraos is the most trusted source for reporting on how the Fed is navigating the most volatile interest rate environment in decades. Timiraos’ fascinating book about the monetary and fiscal response to the COVID pandemic “Trillion Dollar Triage” was described by Warren ...

By |2022-12-09T12:43:45-05:00December 9, 2022|Categories: Financing|Tags: , |Comments Off on Nick Timiraos on what real estate investors need to know about inflation and Fed communication

Why the ‘Story’ Behind a CRE Deal is Crucial

As Livi Kapital sees the market shift, we expect to find new opportunities to invest in. One of the most important questions we ask the sponsor, both when brokering equity or for our direct investments, is “How was the deal sourced?" And "What is the seller profile, and why are they selling? These questions are fundamental. During the past three ...

By |2023-01-06T11:08:00-05:00November 29, 2022|Categories: Exclusion, Financing|Tags: |Comments Off on Why the ‘Story’ Behind a CRE Deal is Crucial

SOFR, So Good: The New Benchmark Interest Rate for CRE Loans

In 2022, SOFR became the dominant benchmark interest rate for floating-rate commercial real estate loans, replacing LIBOR, which had been used for decades. SOFR stands for Secured Overnight Financing Rate, and it is the rate charged for overnight loans secured by U.S. Treasuries made among financial institutions and governments. These overnight loans are part of the multi-trillion-dollar “repo market,” which ...

By |2022-11-08T23:16:30-05:00November 8, 2022|Categories: Financing|Tags: |Comments Off on SOFR, So Good: The New Benchmark Interest Rate for CRE Loans

Don’t Let CRE Property Sellers Fool You With Glitz and Glamour

I recently came across a Midwest multifamily deal that was for sale. I had seen the seller around social media. How could I not? The seller routinely shows off his private jets and how many millions he is making for his investors (which I don't doubt since he was in multifamily since 2013). Watching the marketing material, you get the ...

By |2022-11-04T10:37:09-04:00November 4, 2022|Categories: Financing, Markets|Tags: , , , |Comments Off on Don’t Let CRE Property Sellers Fool You With Glitz and Glamour

A Sign That CRE Refinance Troubles Could be on the Horizon

In the past week I've been presented with three deals that had same story: Sponsor reaching the end of term on their bridge debt-->attempts to refinance--> proceeds offered from permanent lender fall short of bridge balance. Need cash at close. To explain this dilemma, here’s the following example. Say you bought an asset for $25M and planned to spend $5M ...

By |2022-10-04T11:53:27-04:00October 4, 2022|Categories: Financing|Tags: |0 Comments

Underwriting in a Recession

This piece by Ben Lapidus was originally published on Spartan Investments. Today, you can’t turn on the news without hearing speculation about a recession. What would it mean for our economy? Has the definition changed? As a commercial real estate investor, you’re likely considering how shifts in the market may impact your bottom line. You may also be wondering how ...

By |2022-10-03T16:03:52-04:00October 3, 2022|Categories: Financing|Tags: , |0 Comments

CRE Syndicators Need to Be Careful About How They Market Risky Deals

I love syndicators. I respect what they do. It takes guts to buy deals as an operator. They exhibit the ability to take responsibility, execute, and make money for their clients. However, as investment capital becomes harder and harder to come by, some of the marketing that I’m seeing from syndicators is becoming troubling, to say the least. It's OK ...

By |2022-09-29T14:30:23-04:00September 29, 2022|Categories: Financing|Tags: , |0 Comments

How to Avoid Capital Calls

This piece by Rob Beardsley was originally published on Lone Star Capital. The more deals a sponsor does, the higher likelihood that they are going to have to make an unanticipated capital call for one of their properties. A capital call is a request by an investment manager for additional funding from investors in an existing investment. In fund structures ...

By |2022-12-24T14:45:35-05:00September 12, 2022|Categories: Financing|Tags: |0 Comments

What is a Participation Mortgage in CRE?

The normal mortgage works very simply. The lender lends and takes a lien (almost always a first lien) against a real asset, typically lending between 60% to 75% of the purchase price of the asset. In return, the lender receives its money back with interest over a period of time (loan term) and based on an agreed upon payment schedule ...

By |2022-09-07T12:32:03-04:00September 7, 2022|Categories: Financing|Tags: , |0 Comments
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