CB Richard Ellis is the corporate parent of L.J. Melody.
Tupler says both fixed-rate and floating-rate loans are currently available. Fixed-rate loans will generally provide up to 80% of value with loan terms between five and 25 years. Current interest rates vary between 6.5% for short-term low leverage loans to 7.5% for longer-term, higher leveraged loans, Tupler notes.
Floating rates will generally provide up to 75% of value with loan terms between two and five years. Interest rates range from 4% to 5%. But Tupler cautions that the recent economic downturn affects how lenders underwrite multifamily loans.
''As the economy and real estate markets have softened, lenders have become more conservative in their underwriting,'' Tupler says. ''They have increased their underwriting vacancy amounts to remain in-line with the market.''
He adds they are typically underwriting rental income based on trailing three-month collections versus rents in place. They also are closely scrutinizing historical expenses, especially utilities and insurance.
Rahe and Stack asked Tupler if lenders are requiring terrorist insurance for most properties.
''No,'' Tupler replies. ''Lenders are typically only requiring terrorism insurance on large, high-profile assets.''
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