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CHICAGO-While some commercial real estate lenders have the luxury now of being able to turn away business, even the busiest in the frothy capital market admit uncertainty about the future. The culprit, some said at RealShare Chicago, could be the interest-only loans that are the current rage. The RealShare series of conferences is produced by Real Estate Media, publisher of Real Estate Forum and GlobeSt.com. More than 400 industry professionals attended yesterday’s event.

“I think there’s a tremendous risk,” said PPM Finance Inc. executive vice president David M. Zachar, admitting his own company is writing more interest-only loans that he would prefer. “There could be some serious stress in the marketplace.”

Zachar was among panelists discussing debt and equity markets, which included some competitors who are providing more leverage than Zachar’s 75%. For example, GE Commercial Finance and Bank of America are providing loans up to 95% loan-to-value, usually involving a mezzanine lender partner. “Clients want one-stop shopping,” said GE Commercial Finance managing director Debbie Riley.

“I don’t think 90% to 95% financing is for everybody,” added Bank of America senior vice president Patrick T. Burns. “I think you have to pick your spots.”

However, finding a lender may not be too difficult in today’s competitive market, where interest-rate spreads remain thin. “This is a borrower’s market,” says CIBC World Markets managing director David A. Cohen. “If I really like a deal, I like to win it.”

Besides low rates, borrowers are landing mortgages with less than full recourse. “It’s very rare to require it,” said Fremont Investment & Loan regional manager Scott Manlin, whose company is writing loans up to 85% loan-to-value or cost.

While today’s environment may appear overly aggressive, industry veterans like NorthMarq Capital Inc. managing director Dean F. Dornbos noted it is unlike the late 1980s and early 1990s, when overbuilding resulted. “You don’t see very many spec deals going up,” Manlin agreed.

Additional transparency with the greater presence of public companies also is a plus, Zachar added. While the lending business is not without risk, writing loans is what the panelists are paid to do, Dornbos noted. “You don’t get complimented for not lending because it wasn’t a good environment,” he said.

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