Is it Harder to Get Apt. Financing Deals Done Now?

Panelists said everybody is chasing down long-term debt as interest rates begin to rise.

SAN DIEGO—Banks have had lots of changes to deal with over the last 24 months, and lenders are constraining capital, but clients are still seeking higher LTVs, making finance executives work harder to get the same leverage, said speakers at PCBC last week. During the “Capital Markets—Debt & Equity” session, panelists talked about the lending climate for apartments, the challenges borrowers and banks face and the outlook for the future.

Moderator Jeff Zuckerman, regional CFO—West for Alliance Residential Co., asked the panel if it’s been harder to get deals done in the last six months. Shlomi Ronen, principal and founder of Dekel Capital, said there have been lots of changes on the banking side in the last 18 to 24 months. Lenders are constraining capital, but clients still want 70% loan-to-value, while the banks are moving toward 65% LTV. “It’s more work to get the same leverage,” said Ronen.