7.6.18: Meet with Dennis Suh and Mike Sneden at the Regional AAHOA Conference and Trade Show in Long Island, NY on August 7

On August 7, 2018, ValueXpress will be exhibiting at the Asian American Hotel Owners (AAHOA) Regional Trade Show in Long Island, New York. ValueXpress will be exhibiting at Atlantis Banquet & Events, 431 East Main Street, Riverhead, New York, 3:00 p.m.-6:00 p.m.

ValueXpress will be joining AAHOA Regional Director Jayesh R. Patel and the Northeast Region Ambassadors to network and discuss current hotel financing options and trends. Representing ValueXpress at the trade show will be Michael D. Sneden, Executive Vice President, and Dennis Suh, Senior Vice President.

“It’s particularly important for us to keep in touch with our clients and potential clients on what’s available in the hotel finance market,” stressed Suh. “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 financing structure to our clients. The regional conferences provide an opportunity for one-on-one conversations with hotel owners to discuss their financing plans.”

“ValueXpress is an Allied Member of AAHOA and has been exhibiting at the AAHOA trade shows 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 regional trade shows present an excellent opportunity to allow hotel owners to meet personally with us to learn how we can assist them with their financing needs.”

Call Dennis Suh at 212-883-6487 or email him at dsuh@valuexpress.com in advance of the trade show for your personal appointment and be sure to stop by the ValueXpress booth during trade shows hours.

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7.2.18: ValueXpress Revises Loan Document Checklist Required for a Loan Quote

Borrowers have two options to receive a loan proposal for a CMBS conduit loan. The first option is to request a Summary of Certain Indicative Terms, which is a one-page summary of the proposed loan terms that has not been through a complete credit review process, but has a high likelihood that the transaction would be approved consistent with the Indicative Terms. The benefit of a request for Indicative Terms is that Indicative Terms can be provided with less information from the borrower. However, the borrower cannot proceed to close the loan without completing the credit approval process outlined in the second option.

To obtain a Summary of Indicative Terms, click here.

The second option is to provide additional information to allow the transaction to be fully underwritten, which results in a credit-approved Term Sheet for the borrower to execute and proceed through the closing process.

To obtain a credit-approved Term Sheet, click here.

When submitting a loan to ValueXpress, please indicate whether you want a Summary of Indicative Terms or a credit-approved Term Sheet. Questions? Please click here to contact a ValueXpress representative.

 

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

6.26.18: Flexible Office Space Firms Growing Exponentially in New York City

Flexible office space operators are expanding at a rapid pace in New York City, mirroring trends across the United States. Flexible office space is a concept that allows small companies and/or individuals to share or rent workstations or small self-contained office units. The space is often rented on a monthly basis with no long-term commitment.

For example, WeWork, the largest flexible space operator in Manhattan, has now grown to become the second-largest private office tenant in New York City. It’s second only to banking giant JPMorgan Chase, according to several leading brokerage research departments. WeWork just signed a 10-year lease for 11,818 square feet, taking up the last two spaces at the Kaufman Organization’s 15 West 27th Street office building. WeWork will rent the entire ninth and ten floors, with a scheduled move in during early fall 2018.

Common Workspace in The Yard, Gowanus, NY

Common Workspace in The Yard, Gowanus, N.Y.

In addition, The Yard, a WeWork competitor, recently leased the building at 157-163 13th Street in the Gowanus section of Brooklyn, New York. It consists of 25,666 square feet for 10 years on net basis. The Yard features co-working office space for rent on a monthly basis to individual users. The Yard now has nine locations in New York City as well as locations in Philadelphia, Washington, D.C. and Boston.

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ValueXpress Arranges $8,630,000 CMBS Conduit Loan for 2 Independent Hotels in Seaside, OR

ValueXpress has arranged an $8,630,000 first mortgage CMBS conduit loan for the Seaside Hotel Portfolio, consisting of the refinance of two independent hotels located in Seaside, Oregon. The purpose of the loan was to provide a return of equity to the sponsor and obtain a 10-year, fixed-rate loan term on a non-recourse basis to replace an SBA loan.

Seaside Hotel Portfolio, Seaside, OR 1

Seaside Hotel Portfolio, Seaside, OR, $8,360,000 CMBS Conduit Loan

The sponsor constructed the River Inn at Seaside in 2014. The property is the top-ranked hotel in the area, according to TripAdvisor. The property features a saltwater indoor heated pool and spa, fitness room, fire pit, kid’s playground, and indoor game room.

The Inn at Seaside was built in 1981 and purchased by the sponsor in 2009. Since acquisition, the sponsor embarked on a capital improvement plan consisting of significant renovations to the guest rooms and lobby, including exterior upgrades completed in 2017.

Seaside Hotel Portfolio, Seaside, OR 2

Seaside Hotel Portfolio, Seaside, OR, $8,360,000 CMBS Conduit Loan

“The challenge with financing any independent hotel is that generally CMBS lenders prefer to lend on franchised hotels,” said Dennis Suh, Senior Vice President at ValueXpress, who originated the Seaside Hotel Portfolio loan. “However, ValueXpress has successfully closed CMBS loans secured by independent hotels that are located in either core markets or destination coastal markets with strong performance. In this case the hotels are located in the latter.”

One inherent risk to the lender on coastal destination markets is “seasonality.” In such markets, lenders are concerned that in certain months of the year, the property does not generate sufficient cash flow to cover debt service payments. To mitigate this concern, a “seasonality reserve” is created in which the borrower is responsible for setting money aside in strong months to offset shortfalls during weak months.

“In this particular case, we had the rare opportunity during underwriting to increase the loan amount to fund the seasonality reserve,” commented Suh. “The sponsor was able to receive the full cash out that was expected and was very pleased with the overall process and results from the refinancing.”

For a loan quote on a similar transaction, contact Dennis Suh at 212-883-6487 or email him at dsuh@valuexpress.com.

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

6.22.18: ValueXpress Fixed-Fee CMBS Program Takes Off

A few months ago, ValueXpress introduced a “fixed cost” CMBS conduit loan option for loans between $1.5 million and $12 million. “We closed our first loan a few weeks ago and have another three loans in the closing process,” commented Michael Sneden, Executive Vice President at ValueXpress. “Clients are extremely pleased with the process and the lower costs. The first loan closed in 40 days, confirming the ‘streamlined’ process really works!”

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. Furthermore, loan structure has been eased, creating a more “user-friendly” CMBS conduit loan.

“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 Dennis Suh, Senior Vice President at ValueXpress. “The greatest impact is on small balance borrowers who are not used to high transaction costs and complicated loan structure compared with recourse commercial loans from community banks. 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 Michael Sneden, Dennis Suh, or Gary Unkel.

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6.15.18: Borrowers Seeing Improvements in CMBS Loan Servicing

A few years ago, the CRE Finance Council, a trade association for the commercial real estate finance industry, set up a task force to propose improvements to address long-running borrower complaints regarding the servicing of CMBS conduit loans. The formation of the task force resulted from concerns that poor customer service would drive borrowers away from CMBS conduit loans.

Borrowers report seeing improvements as the CREFC task force, lenders and servicers all move to improve borrower servicing experiences. In February 2018, the task force recommended ten voluntary guidelines for CMBS lenders to follow in crafting loan documents. Those recommendations are largely designed to improve consistency and remove ambiguities that can later lead to disagreements between borrowers and loan servicers. These recommendations are starting to be included in the Master Servicing and Pooling Agreements, the guideline document for servicing CMBS loans.

Meanwhile, lenders and servicers have adopted varying changes aimed at improving communication with borrowers, reducing or eliminating certain fees, and streamlining the approval process for new tenants, property releases, loan assumptions and other borrower requests. Borrowers should continue to see servicing improvements as other recommendations are adopted in the future.

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6.12.18: Simon Wins Battle of the Outlet Mall in Suburban St. Louis

In 2013, Simon Property Group and Taubman Centers Inc. both built outlet center projects in Chesterfield, Missouri, which is in the St. Louis area. At the time, experts believed the trade area could support only one traditional outlet center, but neither company would back down from proceeding, which made the stand-off that much more interesting. As it turns out, the experts were right!

In April 2018, the Staenberg Group, headquartered in St. Louis, Missouri, acquired the 300,000-square-foot Taubman Prestige Outlets from Taubman under the terms of a long-term land lease. Staenberg plans to transform the outlet center into a “destination” with “exhilarating entertainment, innovative dining and unique shopping,” according to a press release. The rebranded development will be called “The District.” Meanwhile, Simon’s outlet project, St. Louis Premium Outlets, is thriving with nearly 100% occupancy.

The sale of Taubman Prestige Outlets essentially ends Taubman’s fight with Simon Properties, which operates St. Louis Premium Outlets just a few miles away. Both shopping centers opened within weeks of each other, leaving many analysts and experts puzzled over why Taubman, which had yet to tinker with outlet malls, would try to compete with the more prominent Simon, the largest shopping mall operator in the United States. In the end, Simon won the battle.

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