Three Loans and a Van Arsdale
Capital's loosening, and private investors are starting to come back to the market. Proof: A little ABC for BMC Capital. The loan experts closed three deals in Dallas and one in Houston in the past week.
We spoke yesterday with BMC Capital CEO Keith Van Arsdale (a coworker snapped this iPhone pic for us). BMC specializes in Class-B and C properties in all CRE sectors, and Keith expects to originate at least 150 transactions in 2011. Providing loans for under $10M, the firm's typical investors are individuals. Improvement in this arena has been slower than core assets because private money is slower to enter the market after a downturn. (Think lava, not rapids.) But he's seen improvement over the past year (more liquidity and available capital than six months ago). Keith believes most issues were due to buyers that were inexperienced, out-of-state, and over-leveraged (over 85% LTV). To rectify that, there's more focus on borrowers? experience and portfolio, including location. If a potential borrower only owns California assets, it'll take a strong story to get a loan for a Texas property. And lenders focus on borrowers? real estate schedules and the performance of each building in their portfolios.
The firm closed two loans last week in Garland totaling $6.2M for the refinance of existing debt and limited cash-out for ongoing capital improvements for the 148-unit Cedars Apartments and the 152-unit Centerville Crossing Apartments (pictured). And like a crisp pair of bellbottoms, both are 1970's vintage Class-C properties. BMC Capital loan officer Barrett Linburg says they "were able to structure the loans to provide a small amount of cash out while still maximizing return for the owner who plans to continue to hold these assets.? Considering the 10-year fixed rates around 5.3% with 30-year amortizations at 65% LTV, we tend to agree. And news you can't use: We hear there's one more deal in the works, but mum?s the word.