CONCORD, CA—A significant number of CMBS loans securitized in the 2005 to 2007 time period will be maturing through 2017. As one measure of the volume of CMBS due to mature between now and 2017, consider that Fitch Ratings says about one-third or 35%, of its rated universe is coming due during the next three years.
Furthermore, some $6 billion of loans scheduled to mature next year are showing default. The ratings agency anticipates that many of the peak-vintage loans face the prospect of being unable able to refinance at their respective maturity dates without additional capital. Furthermore, "potential higher interest rates later this year may put additional stress on their ability to refinance," according to a Fitch report.
As part of this refi craze, Redwood Mortgage is funding an increasing number of loans en route to an expected $100 million capital deployment in the next 12 months. One such loan was the $14 million refinance of a fully leased multi-tenant retail property in a high-traffic shopping center in Concord, CA. The transaction helped to meet a timeline commitment of a maturing CMBS loan on the property.
Steve Belleville, director of sales and marketing for Redwood Mortgage, tells GlobeSt.com: "Helping property owners deal with CMBS maturities will continue in 2016 as so many of these securitized loans are coming due or are being refinanced for internal reasons. As Globestreet's reported many times, a wave of 10-year CMBS deals structured in 2006 through 2008 are cycling through, and here at Redwood Mortgage we've been assisting a range of owners throughout California, where CMBS lending is particularly active. Uncertainty in interest rates has also motivated a lot of owner-investors to act quickly. "
The funding will facilitate an improvement program for the property including new facades and other upgrades. The transaction was arranged by Lori Randich, vice president of loan origination for the firm.
Adds Belleville, "Our special-opportunity borrowers run the gamut of owners renovating property in the path of growth; private high-net-worth individuals who are already in real estate or are diversifying their stock-heavy portfolios with property; partnership and tax-motivated events such as Starker exchanges; and real estate components of trust-and-estate strategies."
Redwood Mortgage is a family-owned private lender founded in 1978.
"Active local real estate owners and investors are capturing opportunities throughout California, and Redwood Mortgage provides more flexible and nimble capital versus traditional sources," said CEO Michael Burwell. "We specialize in opportunity-capital in real estate lending, where borrowers have a particular need or challenge that typical lenders often can't accommodate. Redwood Mortgage and its affiliates have loaned nearly $2 billion over 35 years, so we've literally seen just about everything and are able to quickly understand the property's and borrower's needs."
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Lisa Brown
Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.
