In its “Capital Markets” newsletter, Commercial Property Executive featured an article by Aysha Cox, Vice President. Below is an excerpt:
“In 2019, several key sectors will be driving robust growth in the South Florida commercial real estate market: industrial, multi-family, and technology/e-commerce. As companies in these and other spaces flock to Florida — taking advantage of such benefits as a pro-business tax structure, easy access to international transportation, and an all-around business-friendly environment — their presence will help to spur local economic activity. But they may also find some challenges when it comes to securing financing.
It is likely that this activity will drive more demand for housing, and a related increase in demand for land, warehouse and office buildings, all of which are already in limited supply. Consequently, developers will continue to step up their search for prime locations with existing structures to either tear down and redevelop or renovate or reposition. Of course, this also spurs businesses and developers to accelerate their search for reliable financing sources.
But now, tighter banking standards and more caution on the part of traditional financial institutions mean that more business borrowers are considering non-traditional financing sources to stay on track with their pro-forma models. Although banks can generally offer lower interest rates compared to private lenders, the traditional institutions’ loan approval process can be more cumbersome, with a lengthy approval process that carries multiple restrictions.
Speed to Market
Some borrowers have turned to private lenders when they need to close quickly, possibly from an outstanding current loan that’s maturing, or because they need additional funding quickly, for ongoing construction, or because they’re staring at a looming deadline.
The non-bank lenders may also be able to assist investors who are taking on a project with a risk profile that has the potential for “hiccups,” which can scare off banks. Working with each borrower on an individual basis, they can collaborate on developing a loan structure that works for both the borrower and the lender. A bank might turn away a borrower, for example, because of a property’s deteriorating condition, or zoning entitlement approvals aren’t certain, or certain metric thresholds aren’t met. Experienced private lenders have industry experts who can address these and other issues while identifying hidden opportunities that others often miss.”
Case Real Estate Capital, LLC (Case) is a commercial real estate investment company with discretionary capital. Founded in 2013 by industry veteran Sanford Herrick, and joined by industry veteran Chris Mavros in 2014, Case has made a name for itself as a market-leading, high-yield private lender in New Jersey, New York and Florida; a purchaser of sub- and non-performing debt; and a mezzanine and equity investor. At Case, we evaluate each loan, property and real estate debt purchase based on its own merits, the borrower’s or seller’s situation and business plan, and local market conditions. Our company is a respected bridge lender in New Jersey, New York and Florida. Responding to the middle market’s need for smart situational capital, we have already surpassed the $150,000,000 mark in investments and continue to ramp up activities.