We finance a lot of NNN deals and are also seeing our clients move towards what they call in the article “e-commerce-resistant and experiential tenants”. Contrary to the piece, I haven’t noticed the 10 basis point increase in the retail cap rates, but I also don’t run a large public REIT. We’re more concerned with the average interest rate for commercial real estate loan products. Things here have remained relatively steady and there are a few non bank commercial real estate lenders that have been financing our development projects at 100% of cost plus pursuit costs. I think the biggest topics in CRE news are the tax changes which could impact owners and their desire to look at sale-leasebacks as an alternative to holding onto the assets. We’ll be ramping up our efforts on that front towards the second half of this year.

-Adam Horowitz, Principal of Lever Capital Partners and President of the Real Estate Capital Alliance

Click here to read more about changes in the net lease retail market.

Performance might take a slight hit, especially in places like New York where it looks like there’s a new hotel on every block as I walk around different neighborhoods, but I don’t think it’ll make much of an impact. The saving grace is that commercial real estate loans for hotel construction have been tightening up for the last 18 months and therefore only hotels in locations with a clear need and strong sponsorship are on the drawing board for future development. I think the commercial real estate news stories moving forward will be more about commercial real estate refinance stories rather than new builds.

– Adam Horowitz, Principal of Lever Capital Partners and President of the Real Estate Capital Alliance

Click here to read about how competition and overbuilding could threaten hotel loan performance.

Early in the article it is mentioned that “People are looking to have a unique, nonbranded experience,”. We agree both as financiers and as travelers ourselves, but that doesn’t translate well in the commercial real estate lending world. For so many years as we were arranging capital in the hospitality space we’d hear that if it wasn’t a Marriott, Hilton, Starwood or Hyatt then the capital providers weren’t interested. Now with the increasing amount of nonbranded hotels, the lenders will have to be more flexible. We agree with Robert Green’s commercial real estate loans assessment and are therefore being much more selective when it comes to working with established owners and developers.

– Adam Horowitz, Principal of Lever Capital Partners and President of the Real Estate Capital Alliance

Click here to read more about the changing expectations of today’s travelers and how to adapt.

It’s been a good run for us in all sectors but that will clearly be coming to an end. I think the article nails it regarding industrial moving forward as being an outlier with vacancy remaining steady for a few years. We’ve been gearing up to find higher leverage on office and retail properties since those sectors will lag an invariably need more capital than in the past few years.

The other trend we’re seeing is on the construction side. The piece mentions increases in costs and it seems be getting worse with all the tariffs being put in place so we’re working with a lot more non bank commercial real estate lenders to get these deals done. Hopefully there won’t be a double whammy with commercial real estate mortgage interest rates increasing this year.

– Adam Horowitz (Principal of Lever Capital Partners and President of the Real Estate Capital Alliance).

Click here to read more about how ULI’s Forecast Calls for Positive Outlook through 2018, Slowing in 2019.

Parking is coming up more and more as a topic when we are working on development deals. The article hit on the biggest change which is the local government’s willingness to work with the developer regarding the amount of parking per unit. When sourcing a few commercial real estate loans in Las Vegas for multifamily projects we noticed a flexibility from all the parties to discuss this issue and come to a solution that works for everyone. If there’s a sea of change regarding car ownership in the near future this will make for some very interesting commercial real estate news topics for a while.

– Adam Horowitz (Principal of Lever Capital Partners and President of the Real Estate Capital Alliance)

Click here to read more about how parking requirements are impacting apartment developers.

This article hit home as it directly effects the commercial real estate refinance market in the office sector. There have been two projects that we worked on recently where the concessions were much greater than the sponsor anticipated thereby modifying the loan proceeds. In both cases the commercial real estate mortgage interest rates have remained steady and we were able to cut costs in a few areas getting us close to the original dollars. We agree, as Homa notes, that base rental pricing hasn’t changed much so there’s been an ability for lenders to provide additional funds as the concessions burn off. Keeping an eye on each market is difficult and the article did a good job of spelling out which ones are more challenged than others.

-Adam Horowitz, Principal of Lever Capital Partners and President of the Real Estate Capital Alliance

Click here to read more about the oversupply problem and higher concessions in the office sector.