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Monday, 21 June 2010

Freddie Names 4 Approved Mezz Lenders

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Commercial Real Estate Direct Staff Report

Freddie Mac has named four companies to provide mezzanine loans to borrowers of its senior loans under a recently launched program designed to help recapitalize over-leveraged properties.

The four are: Berkshire Group of Boston, Carmel Partners of San Francisco, Essex Property Trust of Palo Alto, Calif., and Waterton Capital Solutions of Chicago.

Freddie earlier this year launched an effort to provide funding, in the form of mezzanine debt, to properties that face an "equity gap" that might result when their values fall to where they can no longer fully take out their maturing senior debt.

"The intent is to help the industry reduce the number of properties that may otherwise become defaults, timely workouts or foreclosures if they don't get much-needed financing," said Mike May, senior vice president of multifamily for the housing-finance agency. He called each of the four mezzanine lenders "experienced multifamily owners, operators or investors."

Under the program, Freddie's seller/servicers will provide fixed-rate senior loans of up to 75 percent of a collateral property's value. They then will work with the approved mezzanine lenders to provide additional financing of up to 15 percent of a property's value, bringing total leverage up to 90 percent. The mezzanine debt would be secured by ownership interests in the collateral. In the event of a default of the mezzanine debt, the lender would become the holder of the ownership interests.

Freddie would either securitize the senior debt or keep it on its balance sheet. And because of the position held by the mezzanine lenders, they would be in a solid position to bid or acquire the B-piece of any resulting securitization.

In order to qualify for a mezzanine loan under the program, a borrower must have at least 10 percent cash equity in the collateral property and its first mortgage must carry a fixed interest rate. The mezzanine debt could carry either a fixed or floating rate.

Comments? E-mail Orest Mandzy or call him at (267) 247-0112, Ext. 211.



Copyright © 2010 Commercial Real Estate Direct www.crenews.com

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“The Weekly” is Commercial Real Estate Direct’s PDF newsletter, sent to subscribers every Friday morning. With over 100 news stories published on Commercial Real Estate Direct each week, “The Weekly” features the top stories in commercial real estate that industry participants need to know first. “The Weekly” also contains:

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Additional Info

  • Syndicate to Realpoint: No
  • Subject: Executive changes, general (EXECG), Mortgages/Financing (MOR)
  • Deal Name: Bear Stearns Commercial Mortgage Securities Trust, 2006-PWR12
  • Company: Gables Residential Trust
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Data Digest

 

CMBS DELINQUENCY VOLUME

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CMBS SPECIAL SERVICING VOLUME

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Top Bookrunners Domestic, Private-Label CMBS - 2017
Investment Bank #Deals Vol$mln MktShr%
Goldman Sachs 17.59 11,819.34 13.68
JPMorgan Securities 14.52 10,968.11 12.70
Citigroup 12.04 10,012.71 11.59
Wells Fargo Securities 14.02 9,936.06 11.50
Deutsche Bank 12.55 9,879.74 11.44

 

RCA CPPI

 

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CMBS 2.0 Spreads

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Top CMBS Loan Contributors - 2017
Lender #Loans Vol$mln MktShr%
Goldman Sachs 146.89 11,719.34 13.63
JPMorgan Chase Bank 117.68 10,114.14 11.76
Deutsche Bank 198.48 9,689.97 11.27
Morgan Stanley 166.18 8,539.78 9.93
Citigroup 199.05 8,088.24 9.41

 

 

 

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