"Today, rental rates have peaked and will likely soften in all categories over the next couple of years," says Herrick. "This will possibly result in the reduction of some asset values, although nobody is predicting the debacle of the 1980s." Scott Harstein, SWH's chief underwriter, comments that the relative unavailable liquidity for purely generic transactions may lead SWH Funding to its roots of providing first mortgages on acquisitions in time-constrained situations. "For seasoned properties with non-prepayable conduit loans, mezzanine financing can provide additional funds for improvements or repositioning," adds Harstein.
Herrick attributes their success to their commitment to responsiveness and a straightforward attitude. "We may not run a charm school," says Herrick, "but our clients appreciate our frank manner."
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