As to the greater numbers of lenders than borrowers Berk adds, "This has been the trend over the last six months. I see this continuing through at least the end of the year and hopefully in 2002 it will return to its historic levels, or at least what it did in 1998-1999." He also notes, "For every deal we get in here we get at least a dozen requests."
He notes that there is currently "a lot of 10-year fixed-rate" loans "out there." He says in general that there's "tons of money out there." Specifically, he says investments in office properties are "at 60-70% LDV and 200-220 over range (over 10-year treasuries), for hotels 250-270 over range (over 10-year treasuries) and for multifamily, 180-200."
Berk identifies one area where there is not as much money. "There's not a lot of portfolio money out there," he says. "That's where the big hole is, especially hotel construction. Equity needed for hotels is at 50-55% and 40% for pre-leased offices. There's almost none for speculative projects."
When asked what he expects in terms of debt he notes that securitized, floating rate loans are in the short-term. "We're seeing two to three-year deals with a maximum of four to five years. The spreads are somewhat lower than fixed-rate loans. We're looking at up towards 80% on preleased on first mortgage basis for leased offices and 70% for hotels."
Concluding his remarks he notes, "Insurance companies are still more conservative than Wall Street. Maybe they'll get up to 75% for a CBD office or 70% for a flagged hotel."
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