The BSC Group remains actively committed to offering a wide variety of loan products to our clients. Through constant communication with our network of capital sources we can pinpoint market dynamics related to structure and pricing of debt products available in the ever-changing capital markets.
Below is a snapshot of popular loan products available to borrowers currently in the market.
CMBS: Rate Range of 7.00%+
The CMBS market remains very liquid and provides for a relatively predictable execution for borrowers with cash flowing assets. The cornerstone attributes of CMBS are the nonrecourse execution that often provides cash-flow minded borrowers with longer amortization schedules, including extended periods of interest only that can greatly enhance the loan constant throughout the life of the loan. CMBS lenders will also provide borrowers with the ability to “cash out” equity, which can provide borrowers with access to liquidity that may be trapped in properties where the value greatly exceeds the current loan balance.
Commercial Banks: Rate Range of 6.75%+
Commercial banks have been under the scrutiny of the fed and have tightened their lending programs substantially over the last 18 months due to recessionary fears. While commercial banks remain active, most are focused on serving existing customers. Banks that are currently willing to lend to new borrowers are looking for strong projects and sponsors and will likely require a significant depository relationship (10-20% of loan balance) on new loans.
Credit Unions: Rate Range of 6.5%+
Credit unions are among the most competitive lenders in the market currently, offering similar products as commercial banks, typically without the same depository requirements. Many Credit Unions have membership requirements and often operate within strict regional footprints, so it can sometimes be challenging to find one with the right balance of loan knowledge, asset underwriting expertise, and member qualification.
Life Companies: Rate Range of 6.5%+
Life Companies are more active in the self-storage space than ever before, and with the onset of the new year they will be flush with new capital allocations. Life Companies ar balance sheet lenders that can offer great flexibility and some of the most competitive rates available for borrowers when the collateral quality, loan size, and market meet their criteria.
SBA: Rate Range of 7.50%+
SBA 7A and 504 products remain viable for borrowers seeking construction financing and/or loans with higher than typical conventional leverage. It is important for borrowers to remember that the SBA provides the guaranty, not the loan, so it is important to find a lender that understands the nuances of the guidelines and can execute accordingly. SBA loans are not a one-size-fits-all product and still needs to be shopped for pricing and structure.
Debt Funds: Rate Range of 8.5%+
Debt funds can be a very important source of capital for commercial real estate borrowers due to the discretionary nature of their private capital given they do not have the same federal oversight or regulatory pressures that commercial banks face. As such, these lenders often take much greater risks in return for higher yields. Debt funds often lend in the bridge space offering loan products that are shorter term in nature with higher rates and fees than conventional lenders like banks, life companies, credit unions, and CMBS.
