LOS ANGELES—Although there is an abundance of capital in the market, lenders are really looking at geography, according to Gary M. Tenzer, principal and managing director for George Smith Partners. Tenzer is moderating the Inside the Capital Stacks panel at the upcoming Real Share Los Angeles conference on March 25, where he will uncover the latest financing trends from panelists Michael Klein, COO and fund manager at Partners Capital Solutions; T.R. Hazelrigg IV, president of Avatar Financial Group; Pat Jackson, founder and CEO of Sabal Financial; and Elizabeth Brauman, chief production officer at ReadyCap Commercial.
“I am going to be talking about geography, loan size, loan structure and asking where the panelists see themselves in the capital stack as well as how these panelists are winning and loosing deals,” says Tenzer. “These are not the typical lenders that you would hear at most conferences. It is a different group of lenders with a different perspective, who do different types of financing from the typical CMBS and construction lending that you would see on most panels.”
Just as in 2013, the abundance of capital will be another theme of this year, but when looking at what property types are attracting the most attention, Tenzer explains that it really depends on location. “Every sector is hot right now, but some sectors are hotter in certain geographies,” he says. “For example, the core downtown markets for core real estate investors are very hot and cap rates are very low. If you go somewhere like the Inland Empire, you aren’t going to find as aggressive of a deal on an office building. Multifamily along the coastline is extremely aggressively priced. So, it is very much based on geography, and that is tied to local economies and employment.” In today’s market, you could finance any property type, even retail properties, which, according to Tenzer, were “out of favor for a long time.” Now, a neighborhood or regional shopping center could get financing with the right preleasing.
This year, the market will see a lot of recapitalization as well due to CMBS maturities. “In the next two years, there is going to be a backlog of CMBS maturities that are coming due. These are all the loans that were made in 2005 to 2007,” says Tenzer. To hear more of Tenzer’s thoughts and commentary from the panelists, join us at Real Share Los Angeles on March 25.