Do just once what others say you can’t do, and you will never pay attention to their limitations again. ~James R. Cook
When fruit matures, it is ready for harvest. When certain wines and cheeses mature, they taste better. And when teenagers mature, they are able to think more logically and make more considered decisions. But what about when commercial mortgages mature?
There may be benefits to waiting around for fruit, wine and teens, but waiting for a loan to reach its maturity date without examining whether it might be open to early refinancing doesn’t make the loan better – it makes the lending opportunity more likely to pass by those lenders who wait too long.
Barrels hold wine in the Kleine Zalze barrel cellar (Photo credit: RODGER BOSCH/AFP/Getty Images)
True, CMBS loans are not readily available for early refi. But most commercial mortgages are balance-sheet loans and can be refinanced well before they come due. The smart move, then, is to recognize that even loans issued in the past year or two could be ripe for refinancing, and to pursue refinancing opportunities for this much larger pool of loans. By waiting until maturity, prospective lenders are missing the boat on new opportunities.
Let’s take an in-depth look at properties in the New York and Chicago areas that have been refinanced within two or three years of issuance, long before the loans matured – what we call “rapid refi” – and examine what kinds of refinancing opportunities are out there. The financing behind these properties demonstrates that, although relationships between borrowers and lenders can be important in real estate finance, there is plenty of room for other lenders to break up the party.
Manhattan | 115 Broad St.
The 22-story office tower at 115 Broad St., in Manhattan’s financial district, was secured by acquisition and construction loans from MetLife, followed by a refi loan two years later by a different bank.
MetLife issued a $153.5 million acquisition loan in 2012 and a $40.8 million construction loan in September 2013. Less than two years later, Germany-based DekaBank Deutsche Girozentrale issued a $250 million refi loan, according toCrediFi data.
The office tower has had more than 30 jobs approved or permits issued by the city in the first half of 2016, for a total of more than $2.3 million in estimated work, and a similar number of jobs in 2015. Jobs this year include an estimated $1.25 million installation of interior non-bearing partitions and related finishes, for which a permit was issued in April.
Bronx | 384 E. 149th St.
While some refinancing offers opportunities for new lenders, the 2013 refinancing loan for the six-story office building at 384 E. 149th St. in the Bronx provided a chance for the property owner to continue its existing relationship with New York Community Bank. NYCB issued an acquisition loan of $12 million in 2011.
The $14.2 million refi loan in 2013 was issued by the same bank. The property has had several building violations concerning its elevator this year.
Chicago | Sheraton Grand Chicago
In June 2012, Metropolitan Life Insurance Companyissued a $162 million loan for the Sheraton Grand Chicago, a Starwood hotel at 301 E. North Water St. on the Chicago River. In December 2013, about a year and a half after the MetLife loan, a different financial institution took over, with Wells Fargo refinancing to the tune of $342 million.
The loan for the downtown Chicago hotel, which was called Sheraton Chicago Hotel & Towers until it was renamed in November 2015, was later assigned to Deutsche Bank. The Sheraton Grand, which has more than 1,200 rooms and suites and an outdoor riverfront lounge, underwent a $25 million renovation that was completed in May 2015. And in April of this year, the city approved an additional $200,000 or so of additional maintenance work, including the replacement of 45 steps and a steel railing.
As a Starwood hotel, the Sheraton Grand is meant to be part of the Starwood-Marriott merger, which nearly came undone earlier this year following an offer from a consortium led by Chinese insurance company Anbang. But Sheraton Grand owner Cityfront Hotel Associates Limited Partners, along with Westin Times Square owner Dream Team Hotel Associates, sued Starwood in New York state court in May, seeking to keep Marriott andStarwood from finalizing the deal.
ARE YOU READY TO SELL OR PURCHASE – I am actively looking to build relationships with Real Estate Investors and Owner Users for multi-family, office, retail, industrial and land in Phoenix- Scottsdale-Tucson-Arizona.
Phoenix Commercial Real Estate and Investment Real Estate: investors and Owner / Users need to really know the market today before making a move in Commercial Properties or Investment Properties in Phoenix / Tucson / Arizona, as the market has a lot of moving parts today. What is going on socio-economically, what is going on demographically, what is going on with location, with competing businesses, with public policy in general — all of these things affect the quality of selling or purchasing your Commercial Properties, Commercial Investment Properties and Commercial and large tracts of Residential Land in Phoenix / Tucson / Arizona. Therefore, you need a broker, a CCIM (Certified Commercial Investment Member) who is a recognized expert in the commercial and investment real estate industry and who understands Commercial Properties and Investment Properties.
I am marketing my listings on Costar, Loop-net CCIM, Kasten Long Commercial Group. I also sold hundreds millions of dollars’ worth of Investment Properties / Owner User Properties in Retail, Office Industrial, Multi-family and Land in Arizona and therefore I am working with brokers, Investors and Developers. I am also a CCIM and through this origination ( www.ccim.com ) I have access to marketing not only in the United States, but also international. Click here to find out what is a CCIM: https://en.wikipedia.org/wiki/CCIM
Feel free to contact Walter regarding any of these stories, the current market, distressed commercial real estate opportunities and needs, your property or your Investment Needs for Comercial Properties in Phoenix, Tucson, Arizona.
Kasten Long Commercial Group tracks all advertised apartment communities, including those advertised by other brokerages. The interactive map shows the location of each community (10+ units) and each location is color coded by the size (number of total units).
Walter Unger CCIM, CCSS, CCLS
I am a successful Commercial / Investment Real Estate Broker in Arizona now for 20 years. If you have any questions about Commercial / Investment Properties in Phoenix or Commercial / Investment Properties in Arizona, I will gladly sit down with you and share my expertise and my professional opinion with you. I am also in this to make money therefore it will be a win-win situation for all of us.
Please reply by e-mail firstname.lastname@example.org or call me on my cell 520-975-5207
Walter Unger CCIM
Senior Associate Broker
Kasten Long Commercial Group
2821 E. Camelback Rd. Suite 600
Phoenix , AZ 85016
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