Search
 

Not Every Deal Wins High Leverage

LOS ANGELES—With all of the capital in the market, lenders are getting more and more competitive—but Robert Hodge of Marcus & Millichap says that only a select few borrowers are getting high-leverage deals.

By Kelsi Maree Borland | Updated on June 24, 2015

LOS ANGELES—“Not every deal works,” Robert Hodge, senior director at Marcus & Millichap tells GlobeSt.com. Although the market is flooded with capital, and every day new deals close with incredible terms—leverages reaching 85% or LIBOR below 3%—Hodge says that this isn’t the norm, and generally, lenders are sticking to the fundamentals. An expert in debt souring, Hodge is moderating the Debt For Every Deal panel today at RealShare Investment & Finance in Downtown Los Angeles. 

“Everyone wants to get competitive, but they want the good deals in the good locations. That’s not every deal, and that is where is gets difficult,” Hodge says. “There are borrowers with credit issues from 2007 and 2008, and most lenders don’t want to touch that. Then, there are lease roll overs that are putting deals at risk and lenders won’t go to the leverage that borrowers need to be refinanced. Everyone wants to do an anchor tenant on main and main, but it is the properties in tertiary markets that are tough to do—and those deals still have to get done.”

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.