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The Capital Markets Frenzy

San Francisco Mixed-Use

If you thought the tug-of-war between Box and Dropbox was thrilling, you haven't seen lenders vying for borrowers. That's why we're excited to be holding our San Francisco Capital Markets Summit Sept. 16 at the Hotel Nikko. Here are some trends:

1) A Robust, Competitive Bay Area

Among our speakers: Prudential Financial principal Jaime Zadra, who's closed 20 Bay Area loans in the past year. She says we can thank high pricing and low cap rates. The equity guys expect office rents to continue their rise, while more buyers are converting leases to market rates before exiting in three to five years. That means floating-rate requests are flowing in because of that short-term hold period on the equity side. In multifamily, she's spotting lots of construction perm and traditional, stabilized loan requests. Increased liquidity in the market also means stiff competition among lenders. Jamie, who's in Seattle to make some deals, says this is seen across the West Coast, though not as big or diversified as the Bay Area.

2) A Good Run for Re-Fis

One Prudential deal this year was an apartment refi in Palo Alto for the Stanford Villa Apartments (above, we snapped its fountain self-administering the ice bucket challenge). She also closed a couple refis in San Mateo, including for an Equinox and Starbucks, and a refi in Los Altos for a small building called Los Altos Gateway. The amount of loans depends on deal flow and what's going on year to year; a typical year for her is $700M to $1B.

3) The East Bay Gaining Ground

Jaime has seen the East Bay start to rebound, with lots of loan requests. As borrowers get priced out of S.F., especially on the office side, they are attracted to cheaper East Bay alternatives. Walnut Creek is usually first, then other areas like Oakland (its mayor Jean Quan, above). Over the last 18 months, there's been a handful of trades in Oakland, as more users want to be in its downtown.

4) The Rise of CMBS 2.0

Jaimie's seeing significant spread compression, as well as the rise of "CMBS 2.0." (Earlier this year, Cassidy Turley partner Kurt Scheidt, above, told us the CMBS pie has shrunk but the number of participants has increased almost twofold—27 in 2007 to 45 in 2013.) We'll have even more trends for you at our event; register today and don't miss out!