Banking on CRE: Texas Lenders Break Down What They Look for in Deals

Robert LaRue knew it was a blink-and-you’ll-miss-it kind of a deal. His client, who happened to be another mortgage banker, was refinancing a 230-unit apartment complex. “The 10-Year Treasury dropped down to 60 basis points. I’d never seen it hit that number in my career,” says LaRue, Senior Vice President of Grandbridge Real Estate Capital.

While the client debated locking in that rate or waiting for it to drop, the 10-Year rebounded a bit. “We closed at a spread of 165 over the 10-year Treasury, which was 1.04% at the time of rate lock, for an all-in rate of 2.69%, 10-year term, 30-year amortization, nonrecourse,” LaRue shares. “That deal included an $8 million cashout to the borrower.” The lender is a life company, which rarely agrees to cashouts as it did for this deal. It was a sign to him that the appetite for multifamily investment is there. “My advice to borrowers is to take advantage of these rates while you can,” says LaRue.

He calls the real estate finance sector “much improved” compared to this time last year. Other experts REDNews spoke to used words such as “robust,” competitive” and “vibrant.” “There’s a lot of capital being put to work and I think there’s more capital coming in, so the overall health of the capital markets in terms of liquidity is pretty high,” says Jeffrey Erxleben, Executive Vice President and Executive Managing Director for NorthMarq.

“From an asset class perspective, real estate is looked upon pretty favorably. There are plenty of opportunities to deploy capital into many different options for borrowers depending on their overall strategy.” Click to read more at