March 24, 2018
Prime Rate

Featured Image for 2018 1Q Financing Update

2018 1Q Financing Update

The start of a new year provides us with a chance to reflect on the past twelve months and identify a few key insights into the capital markets that our Borrowers can hopefully take advantage of heading into 2018.  Perhaps the most dramatic change in the debt markets in 2017 was the flattening of the yield curve, brought on by the Federal Reserve’s decision to raise its target for the short term federal funds interest rate on three separate occasions in March, June, and December. The federal funds rate is the interest rate that banks charge each other for overnight loans, and as a result, has a more direct impact on short-term interest rates. The chart above shows...

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Featured Image for 2017 Mid-Year Financing Update - Spotlight on Multifamily Lending

2017 Mid-Year Financing Update - Spotlight on Multifamily Lending

The first half of 2017 has seen tremendous lending activity from our correspondent life insurance companies, as several are ahead of plan for their 2017 loan allocations.  Essex has recently observed that life companies have been particularly competitive lending on multifamily properties, especially in the past few months.   The multifamily lending space is typically the domain of Freddie Mac and Fannie Mae, but recently, Essex has observed several life companies outperforming the two agencies, both in terms of loan proceeds and interest rate.  Two multifamily deals that Essex has worked on in the past two months have stood out in particular.  O...

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Featured Image for Are We Amidst A New Era of Construction Finance?

Are We Amidst A New Era of Construction Finance?

This article appeared in the September 21st issue of the Colorado Real Estate Journalwww.crej.comThe rumors and anecdotes you have heard about difficulties securing construction financing are true – banks are significantly curtailing their construction loan allocations and tightening their lending requirements, signaling a shift in how development deals might get financed going forward.  Banks are citing new regulations as reasons for this pullback, but these regulations have been in place for years.  Why the sudden change?  After speaking with several bankers, the answer appears to be a combination of two factors – a weariness of the high volume, low marg...

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Featured Image for Quarterly Financing Update - 2Q 2016

Quarterly Financing Update - 2Q 2016

The first six months of 2016 have seen interest rates for commercial real estate dip to record lows, which has driven an uptick in refinance activity across all property types. Life insurance companies have been the primary source of capital for most investors, as CMBS issuance has yet to catch up to the pace set in 2015. Year-to-date CMBS issuance is currently less than 60% of 2015 levels. As a result, life insurance companies are close to reaching their 2016 funding targets, with many reporting that they have committed or closed more than 80% of their 2016 allocation. A similar trend has emerged in bank-issued construction financing. Several of Essex’s primary...

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