Texas Real Estate Business

FEB 2018

Texas Real Estate Business magazine covers the multifamily, retail, office, healthcare, industrial and hospitality sectors in Texas.

Issue link: http://texasrealestatebusiness.epubxp.com/i/935994

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What is the biggest challenge you anticipate in 2018 as a direct lender or financial intermediary in commercial real estate? There appears to be an increasing supply of capital — both debt and equity. Increased debt capacity could create a supply-demand imbalance, which in turn could lead to a loosening of underwriting standards and put pressure on margins, making it harder to meet production goals with quality business. Rising rates could also put pressure on margins. Where do you see the biggest opportunity for your company in 2018? While the oversupply of capital is a challenge, the stratification of the market creates niche opportunities. Products and markets that are receiving extra scrutiny, such as retail and Houston, create opportunities for creative capital sources. What is your company's lending strategy for 2018? Are there any new lines of business or opportunities that you are pursuing? We plan to continue to be a niche lender looking for unique opportunities with local sponsors who have experience in the product types and markets that we are financing. What property sector of commercial real estate will experience the most activity in 2018, and why? Workforce housing (Class B and C multifamily) because of value-add opportunity and the depth and stability of the demographic. Industrial will also do well due to growing demand with shift in retail and need for staging and improving U.S. manufacturing. What advice are you giving your borrowers to help them maximize their lending strategy in 2018? Our advice is to scrutinize both the debt and equity to assess certainty of execution. Both sources of capital should facilitate the intended business plan and provide for contingencies. Patrick Ramsier Managing Director, Commercial Real Estate Finance ADVERTORIAL Products and markets that are receiving extra scrutiny, such as retail and Houston, create opportunities for creative capital sources. " " What is the biggest challenge you anticipate in 2018 as a direct lender or financial intermediary in commercial real estate? Long- and short-term interest rates may very well continue to rise over the course of 2018. A rising interest rate environment will undoubtedly result in differing desires of our various borrowers. As a result, borrowers will wait to lock in the rate and close their loan as they process market dynamics, giving them time to decide what they believe the "new normal" for interest rates will be. Most borrowers will be focused on a quick turnaround of our underwriting and processing in order to be ready to quickly lock in the interest rate on their new loans. Should the market experience what may be a temporary drop in rates, or if borrowers feel that a rate rise is imminent, rapid rate lock is crucial. Either way, JLL will continue to be ready to quickly lock in each loan's interest rate through early-rate lock programs and will maintain quick loan processing and underwriting with banks, life companies, the GSEs and other sources. Where do you see the biggest opportunity for your company in 2018? JLL's biggest opportunity will be continuing to advance our visibility as an advisor to our clients. We have advisors across the country who are experts in all facets of debt and equity, and who have the experience to assist customers in portfolio analysis, buy decisions, and sell versus hold decisions. Our team's expertise, experience and reach will enable us to continue increasing our market share during the year. What is your company's lending strategy for 2018? Are there any new lines of business or opportunities that you are pursuing? JLL will continue to advance and enhance its visibility as an advisor to its customers. In 2018, we intend to further invest in our market-leading research capabilities. As the multifamily market matures, multifamily owners need timely and in-depth data in order to make their buy, sell, hold, refinance and/ or recapitalization decisions. Multifamily owners need to stay abreast of the impact of rising interest rates, income tax law changes, increasing affordable housing demand and housing finance reform for the GSEs. The current administration's decisions regarding affordable housing and the government's role through HUD will also have an enormous impact on the multifamily sector. As always, we will continue to follow the economy, job creation and household formation. In 2018, our advisors and research team will prioritize organizing, capturing and analyzing this data, and then synthesize it into meaningful information and guidance for our clients. Brian Kelleher International Director ADVERTORIAL JLL will continue to be ready to quickly lock in each loan's interest rate through early-rate lock programs and will maintain quick loan processing and underwriting with banks, life companies, the GSEs and other sources. " "

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