Bisnow DFW Capital Markets Summit: Day 2
CMBS loans accounted for $80B in production in 2013, and 2014 is projected to eclipse that. Speaking at our DFW Capital Markets Summit last week, Goldman Sachs real estate financing group southwest region director Nick Losada says he’s seeing more requests for higher leverage and interest only deals as properties have flattened some. Because of that, many borrowers on the equity side can’t add value, so they have to increase their yield from returns on financing.
When the fourth quarter closes, it may wrap up the best year of deals ever seen by J.P. Morgan head of real estate banking Joe Griffith (center, with Hillwood’s Bill Burton and Munsch Hardt Kopf & Harr’s Rick Kopf). For this region, Joe is seeing a lot of build-to-suit industrial with some spec and retail, too.
The illustrious panel: Citigroup Global Markets director of CMBS and structured finance Billy Hurst, Nick, Joe, and Winstead shareholder Nick Pyka, who moderated. Nick revealed he was voted Mr Know-it-all by his senior class in high school; now he focuses on commercial real estate transactions, with an emphasis on real estate finance. (Though he still knows things.)
Billy says the first quarter was Citigroup’s best since CMBS 2.0 picked up. There’s opportunities on the interest only front, where agencies may not be as aggressive, he says. Timing comes into play on the CMBS side, where a deal can be cranked out in a week, if needed (but, 30 days is common). Billy's also starting to see a pick-up in refinancing deals in the last two to three months from the owners who financed deals with them in 2004 and 2005. (Between that and the resurgence of Adam Levine, it's a good time for things that were meaningful to us all in 2004.)