2.16.18: Meet with Jay Bhakta and the ValueXpress Team at the Annual AAHOA Convention & Trade Show in National Harbor, MD – Booth #727

On March 28-29, 2018, ValueXpress will be exhibiting at the annual Asian American Hotel Owners (AAHOA) Trade Show in National Harbor, Maryland. ValueXpress will be located in Booth 727 at the Gaylord National Resort & Convention Center 11:00 a.m.-5:00 p.m. on Wednesday, March 28 and 11:00 a.m.-5:00 p.m. on Thursday, March 29.

Representing ValueXpress at the trade show will be Michael D, Sneden, Executive Vice President; Dennis Suh, Senior Vice President; Jay Bhakta, Senior Loan Originator and Neal Desai, Loan Originator.

“This year it’s particularly important for us to talk with our clients and potential clients,” stressed Bhakta. “We want to share how we use our 25 years of experience to deliver a smooth loan process as well as leverage our extensive Wall Street contacts to provide the best terms and structure to our clients.”

“ValueXpress is an Allied Member of AAHOA and has been exhibiting at the AAHOA Trade Show for over 15 years,” commented Sneden. “We have completed over 300 hotel loans during this period with many of those loans to AAHOA members. The trade show presents an excellent opportunity to allow hotel owners to meet personally with us to learn how we can assist them with their financing needs.”

ValueXpress welcomes the opportunity to meet with hotel owners at the trade show to explain in detail its SBA 7(a), SBA 504, USDA B&I, CMBS conduit and conventional loans for hospitality properties. Call Jay Bhakta at 601-918-2850 or email him at jayb@valuexpress.com in advance of the trade show for your personal appointment and be sure to stop by our booth (#727) during trade shows hours.

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Posted in AAHOA, CMBS Conduit Loans, Commercial Lending, Commercial Real Estate Loans, Michael D. Sneden, News & Recent Closings, SBA 504, SBA 7(a), SBA Loans, The Banker's Mortgage Conduit, Valuexpress | Tagged , , , , | Leave a comment

2.13.18: Putting the Rise in the 10-Year Treasury and 10-Year Swap in Perspective

A number of our clients are calling concerned over the rise in the 10-Year Treasury and 10-Year Swap that has occurred over the past few months. After touching a 2017 low of roughly 2.00% in September 2017, the 10-Year Treasury and Swap have steadily risen to 2.90% as of last week. While the rise of 90 basis points is significant, the absolute levels of the 10-Year Treasury and Swap, even at 3%, are well below historic levels. The graph below is quite telling. It plots the 10-Year Treasury rate since 1962. Note that the range of 2.0%-4.0% has not been seen since 1962, and the range of 2.0%-4.0% has only been prevalent since the Great Recession.

graph

As it relates to overall interest rates on CMBS conduit loans, much of the increase in the 10-Year Treasury and 10-Year Swap rates has been offset by declines in loan spreads. Since the interest rate on a CMBS conduit loan is set by adding the 10-Year Swap rate and the loan spread together, if loan spreads are declining while the 10-Year Swap rate is increasing, they can offset each other. This is what is occurring in the CMBS market. Indeed, strong demand for CBMS securities and competition for good loans are resulting in declining loan spreads, which is benefitting borrowers despite the rise in the 10-Year Treasury and Swap rates.

 

Posted in Commercial Lending, Commercial Real Estate Loans, Michael D. Sneden, News & Recent Closings, The Banker's Mortgage Conduit, Valuexpress | Tagged , | Leave a comment

2.7.18: More Benefits of the Fixed-Cost CMBS Lending Program

Last week we provided some exciting information for small balance CMBS borrowers ($2 million-$10 million) with the introduction of a fixed-fee CMBS conduit loan. The fee — $25,000 — covers all third-party transaction costs, including appraisal, property condition assessment, Phase I environmental and lenders’ legal costs.

Other benefits to this program are important as well. We touched last week on the “lighter” Loan Agreement. It is shorter and more typical of community bank commercial loan agreements. Furthermore, there is no cash management required in the fixed-fee program. Cash management has become a sore point for CMBS borrowers and waiving this requirement is a big win for CMBS borrowers. In addition, an opportunity exists to have escrows for capital improvements, tenant improvements and leasing commissions waived for low leverage deals or waived in exchange for partial recourse in higher leverage deals. There is simply more flexibility in the fixed-fee program than typical CMBS conduit loan programs.

“As an example of how good this program is, we recently had a hotel deal in which the franchise agreement was to expire in three years,” commented Michael Sneden, Executive Vice President at ValueXpress. “The expiration was too far out to get a renewal and associated Property Improvement Plan (PIP), but it was too soon to collect enough reserves for the eventual PIP.”

The solution was to collect $375,000 through regular monthly FF&E collections in conjunction with a $1-million personal guaranty for the balance of the estimated PIP. The guarantee will burn off once the PIP is 100% completed and paid for.

 

Posted in CMBS, CMBS Conduit Loans, Commercial Lending, Commercial Real Estate Loans, Michael D. Sneden, News & Recent Closings, The Banker's Mortgage Conduit, Valuexpress | Tagged , | Leave a comment

ValueXpress Arranges $5.2-Million CMBS Conduit Loan for the Refinance of a 74-Room Holiday Inn Express Located in Fort Worth, TX

ValueXpress has arranged a $5.2-million CMBS conduit loan for the refinance of a three-story Holiday Inn Express hotel constructed in 2006. The hotel is located in Burleson, Texas, a suburb of Fort Worth. The sponsor will utilize a portion of the cash-out loan proceeds to complete a Property Improvement Plan (PIP) in conjunction with a 10-year franchise license renewal. The property is a Quality Excellence Award winner, a designation that honors hotels that have maintained high standards in product quality, hotel operations and customer satisfaction.

Holiday Inn Express, Burleson TX

Holiday Inn Express – Burleson, TX

Amenities include a meeting room, exercise room, complimentary breakfast, high-speed internet access, a business center, hot and cold breakfast and an indoor swimming pool. In addition, the property provides a complimentary guest reception Monday through Thursday at which it serves a selection of food, beer and wine.

“The transaction was challenging as we analyzed the property operating statements and noticed many accounting entries that did not make sense,” noted Jim Brett, head of underwriting at ValueXpress. “We alerted the sponsor, who determined that the accounting professional recording entries was not using the correct expense categories. The person was fired.” A new accountant needed to be hired and the books corrected in time to meet an SBA loan payoff on the third Thursday of the month.

Once the new accountant was hired, ValueXpress walked the accountant through the format required to close the loan. The accountant worked tirelessly to get it done, and the loan closed before the SBA deadline.

 

Posted in CMBS, Commercial Lending, Commercial Real Estate Loans, Michael D. Sneden, News & Recent Closings, Valuexpress | Tagged , , , | Leave a comment

2.2.18: IMPORTANT UPDATE: Fixed-Cost Program Available for CMBS Conduit Loans

Unrestricted cash-out and no personal guarantees are compelling features of CMBS conduit loans. To make CMBS conduit loans even more attractive, a “fixed cost” option is now available for loans between $2 million and $10 million. Furthermore, loan structure has been eased, creating a more “user-friendly” CMBS conduit loan.

The program provides for a fixed fee of $25,000 for all third-party transaction costs, including appraisal, property condition assessment, Phase I environmental and lenders’ legal costs. In addition, loan documents have been shortened, cash management is typically not required, and reserves for tenant improvements and leasing commissions can be waived.

“The CMBS conduit industry has been grappling with higher transaction costs and more restrictive loan structure since the restart of CMBS conduit lending in 2010,” commented Michael Sneden, Executive Vice President at ValueXpress. “The greatest impact is on small balance ($2 million to $10 million) borrowers that are not used to high transaction costs and complicated loan structure compared with recourse commercial loans from community banks,” said Sneden. “Now we have lower costs and a friendlier CMBS conduit loan to compete better with local banks.”

The program is nationwide and covers all the typical CMBS conduit loan asset classes — office, retail, industrial, multifamily, self‐storage, manufactured housing and hospitality. Loan terms are 5, 7, or 10 years, and interest rates are similar to other CMBS conduit loan programs. The maximum loan-to-value is 75%.

To obtain a no-obligation loan quote, contact Mike Sneden (msneden@valuexpress.com), Dennis Suh (dsuh@valuexpress.com, or Gary Unkel (gunkel@valuexpress.com).

Posted in CMBS Conduit Loans, Commercial Lending, Commercial Real Estate Loans, Michael D. Sneden, News & Recent Closings, The Banker's Mortgage Conduit, Valuexpress | Tagged , , , | Leave a comment

1.30.18: ANOTHER IMPORTANT UPDATE: Announcing Significantly Improved Bridge Loan Terms!

ValueXpress has announced an exciting bridge loan program that we want our clients to have access to right away. Our investor is seeking mortgage loans on transitional and value-added real estate projects that require time and capital to re-position, perform renovations, and/or increase rents. The asset types that apply are multifamily, office, industrial, independent living and student housing. The minimum loan size is $10 million, but it can go up to $100 million.

This capital is especially attractive because the leverage is up to 80% of the all-in cost or appraised value, and interest rates start at LIBOR plus 350. Loan terms provided are up to three years for the initial term plus extension options (18-month minimum interest and no lockout). Also available is a two-year initial term with extension options, in which case only 12 months of interest must be paid in the event of prepayment, but there is no lockout. The lender desires locations in the continental United States with historically strong or improving markets and solid fundamentals. The lender desires high-quality Sponsors with demonstrated track records of executing similar business plans. This loan is non-recourse except for “Bad Acts.” Breakeven/negative cash flow at closing is acceptable, provided market comps support project stabilization within the loan term with Debt Yield and LTV appropriate to facilitate an exit.

Are you interested in learning more? Do you have a deal you’d like to discuss? Contact Dennis Suh (dsuh@valuexpress.com), Mike Sneden (msneden@valuexpress.com), or Gary Unkel (gunkel@valuexpress.com).

Posted in Commercial Lending, Commercial Real Estate Loans, Michael D. Sneden, News & Recent Closings, The Banker's Mortgage Conduit, Valuexpress | Tagged , , , , | Leave a comment

1.24.18: Zions National Real Estate Program Available for Hotels After 10-Year Hiatus

Zions Bank National Real Estate lending program has reopened for hotels. While the Zion’s National Real Estate platform remained available through the financial crisis, the program was closed for hotels at that time. Zions Bank is now accepting applications for conventional and SBA 504 loans in Utah (where Zions is headquartered) and Idaho. It is anticipated that the program will expand to additional states over time.

Zions National Real Estate lending program is a co-origination platform in which banks and affiliates originate owner-occupied and investment properties utilizing Zions underwriting standards. ValueXpress has participated in the program since 2003 through its affiliate, Country Bank. In the hotel program, the maximum loan amount is $8 million. The maximum combined LTV utilizing the SBA 504 program is 85%. The maximum LTV without an SBA 504 companion loan is 65%. The program is available for newer mid-scale franchised hotels. Loan underwriting is income-tax return based.

“ValueXpress historically originated many hotel and non-hotel loans for the Zions Bank National Real Estate lending program, particularly in 2004-2008,” commented Michael Sneden, Executive Vice President at ValueXpress. “We look forward to the hotel program being expanded to additional states, and we expect to originate a significant amount of hotel loans to complement our CMBS conduit loan business in hospitality.”

Contact Dennis Suh (dsuh@valuexpress.com), Mike Sneden (msneden@valuexpress.com), or Gary Unkel (gunkel@valuexpress.com) if you are interested in learning more or if you have a deal that you would like to discuss.

Posted in Commercial Lending, Commercial Real Estate Loans, Michael D. Sneden, News & Recent Closings, SBA 504, SBA Loan Processing, SBA Loans, The Banker's Mortgage Conduit, Valuexpress | Tagged , , , | Leave a comment