Capital markets guru Charles Foschini has switched allegiances.

MIAMI—Will the lending market slow in Florida this year? Will new sources of capital pick up where traditional lenders aren't willing to step in at this stage of the cycle?

GlobeSt.com caught up with Berkadia senior managing director Charles Foschini, who recently left CBRE, to get his predictions on the lending environment for the year ahead. He also shares where he sees opportunities and the new sources of capital he anticipates coming online.

GlobeSt.com: What are your predictions for the lending environment in 2017? And how will that impact Florida commercial real estate activity?

Foschini: We anticipate a brisk pace of activity over the next several months. While interest rates are climbing, they are still well below historical averages, so buyers who have been sitting on the sidelines may enter the market now, before rates go even higher.

It's also a good time to refinance or convert bridge loans to permanent loans. And debt, while important, is only one part of the equation; Florida's fundamentals continue to be positive.

Strong demand as a result of above-average job and population growth, coupled with limited new supply, is driving rents up in all asset classes—above the peak of last cycle in some cases. The real estate operators we work with are excited about the prospect of strong performance over the next 24 months.

GlobeSt.com: Where do you see the opportunities in 2017? Any particular metro areas or product types?

Foschini: Miami-Dade and Broward counties, and the Tampa and the Orlando CBDs, are still marquis locations for institutional capital. Private capital opportunities can be found in all of Florida's submarkets, including secondary and tertiary markets. Multifamily value-add opportunities have expanded by virtue of some of the new “green” lending programs rolled out by Fannie and Freddie, which give a distinct advantage in terms of leverage and spread for investments in that kind of product.

GlobeSt.com: Do you anticipate new sources of capital entering the arena in 2017?

Foschini: Banks are reluctant to provide construction and transitional funding unless there are large compensating balances provided by the borrower. That inefficiency has created an opportunity for debt funds to expand into the value-add space, and I expect new sources of capital to emerge in 2017 to fill the void the banks are creating.

MIAMI—Will the lending market slow in Florida this year? Will new sources of capital pick up where traditional lenders aren't willing to step in at this stage of the cycle?

GlobeSt.com: What are your predictions for the lending environment in 2017? And how will that impact Florida commercial real estate activity?

It's also a good time to refinance or convert bridge loans to permanent loans. And debt, while important, is only one part of the equation; Florida's fundamentals continue to be positive.

GlobeSt.com: Where do you see the opportunities in 2017? Any particular metro areas or product types?

GlobeSt.com: Do you anticipate new sources of capital entering the arena in 2017?

Instant Insights /

Charles Foschini Makes Strong Predictions for 2017 Lending Market

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