Category: Commercial Mortgage Lending

Carried Interest Unexpectedly Re-emerges for CRE

by Randybaconin Commercial Mortgage Lending, Real EstateLeave a Comment on Carried Interest Unexpectedly Re-emerges for CRE

WASHINGTON, DC—Congress has been trying to change carried interest’s tax characterization for years and in some instances, came rather close to suceeding. More recently, the issue died down — at least on the Hill — as the conversation shifted to comprehensive tax reform.

‘Carried interest’ is safe for now, has been the unspoken message.

Last week that message changed.

On Wednesday the Internal Revenue Service quietly proposed a rule that would effectively do what numerous proposed acts and measures could not: ban companies such as private equity firms from converting the management fees they receive from their investors — fees that would normally be taxed as ordinary income — into capital contributions invested in their funds. These are taxed at a much lower tax rate.

Read the entire article on GlobeSt.com  here.

What the Water Crisis Means for CRE Owners

by Randybaconin Commercial Mortgage Lending, Real Estate

Drought pictureBecause of the ongoing California drought and the statewide water restrictions, commercial real estate owners need to ensure water installations and irrigation systems use recycled water, and prevent water run-off and waste, according to a JLL report.

California’s water crisis and what it means for CRE owners reviews the regulations that were put into place on March 27 and the possible implications as well as water management solutions for commercial real estate owners.

It says that for landlords, incentives can help mitigate the costs associated with replacing lawns, improving irrigation systems and upgrading metering systems to monitor water flow more accurately.

According to the EPA, landscape water use for commercial properties can be as high as 22 percent for office buildings.

Bank of America expects to save 5 million gallons of water by transitioning from traditional landscaping to xeriscaping at six of its banking centers in Southern California.

San Diego Gas & Electric expects its new water-wise landscaping project at Century Park, its Kearny Mesa headquarters, to save the utility more than 4 million gallons of water a year, a 40 percent campus reduction.

Will This Lending Strategy Become the Norm?

by Randybaconin Commercial Mortgage Lending, Real Estate

TAMPA, FL—These days, many institutional lenders have no interest in hanging on to problem commercial loans. In fact, special asset departments at many banks are shrinking or, in some cases, even disappearing completely.  Instead of servicing problem loans, these financial institutions are focused on selling these loans to capital companies and other investors, typically in large portfolios.

Read the rest of the article at this link

 

Green Buildings Get Lower Interest Rates

by Randybaconin Commercial Mortgage Lending, Real Estate

The US Federal National Mortgage Association, Fannie Mae, will for the first time provide lower interest rate loans to green multi-residential buildings.

Fannie Mae will grant a 10 basis point reduction in the interest rate of a multifamily refinance, acquisition or supplemental mortgage loan for buildings with a green building certification. For example, if the market interest rate is 4 percent on the multifamily loan, the new rate is 3.9 percent with this pricing break. On a $10 million dollar loan amortizing over 30 years, the owner would save $95,000 in interest payments over a 10-year term.

Rick Fedrizzi, chief executive and founding chair of the US Green Building Council, which administers the LEED green building rating system, says this is both an incentive to build green and an incentive for existing buildings to achieve certification.

In addition to having a smaller carbon footprint, green buildings cost 19 percent less to maintain than their conventional counterparts, according to a US General Services Administration study.

Commercial Mortgage-Backed Securities Make Comeback

by Randybaconin Commercial Mortgage Lending

Some Warn Market Could Be Getting Overheated

By

Eliot Brown

A hunt for yield and a gradually improving property market are bolstering a key engine of U.S. commercial property lending, helping borrowers to refinance but also reigniting fears the market is getting overheated.

Read the complete article at http://www.wsj.com/articles/commercial-mortgage-backed-securities-make-comeback-1421175548