| INSURANCE COMPANIES | Capital, insurance premiums, annuity sales, separate accounts. | Debt important. Equity less important | Moderate | Most competitive on lower/moderate leveraged deals in major metro areas, and for terms longer than 10 years. | Most lenders are lending actively but conservatively, focusing on multifamily and industrial. Many avoid office, and all commercial assets are scrutinized for income stream viability. |
| CONDUITS/CMBS | Sale of mortgage backed securities through public markets. | Important in secondary/tertiary markets and for $250M+ loans. | Limited | Permanent loans, mainly 10 year terms. Focus on B properties; transactions needing "structure" and large loans. | Some but not all CMBS lenders are in the market after a significant COVID-related slowdown or withdrawal. |
| FANNIE & FREDDIE (GSE's) | Mortgage backed securities with implied government guaranty. | Significant but only in apartment and assisted living loans. | Good | Operating through specially designated underwriters (DUS or Program Plus lenders). | Spreads have varied up and down. Agencies are most competitive on properties defined as affordable or "green." |
| HUD / FHA | Sale of Ginnie Mae securities backed by FHA insurance mortgage. | Significant for apartments, affordable, senior living, and nursing homes. | Strong | A source of both construction and permanent financing, with higher leverage than available elsewhere. | Interest rates highly competitive. Apartments: offer attractive perms on new construction, lower MIP on affordable and "green", same underwriting for all markets. |
| NON-BANK BRIDGE LENDERS | Capital, credit lines and debt offerings. | Significant for transitional assets. | Good | Seek transitional assets that warrant higher rates - typically floating. | Usually non-recourse at higher leverage than banks. |
| REGIONAL/LOCAL BANKS | Capital and deposits. | Important for loans under $35M. | Strong | Construction, interim, and permanent. Particular interest is on 2-7 year, fixed rate deals to cash flowing properties. Construction financing on apartments, storage and pre-leased commercial. | Fairly strict underwriting, but there are numerous institutions; many are seeking mortgages and can be very competitive. |
| MONEY CENTER BANKS | Mostly deposits, capital, debt offerings. | Important for loans over $25M. | Moderate | Focus on highly capitalized borrowers with short to mid term credit needs. | Continued heavy focus on borrower strength. |
| PENSION FUNDS | Pension assets typically invested through advisor-managed funds. | Mostly felt in equity markets. | Limited | Purchase or joint venture of high quality industrial, life science, and apartment properties. Some active in debt sphere. | Focus on multifamily, industrial, life science, and in general premium properties in top-tier markets. |
| REITs | Sale of stock plus entity level or mortgage debt. | Significant on equity. Nominal on debt. | Limited | Most acquire assets in a defined property sector. | Acquisition focus similar to pension fund investors. |
| PRIVATE INVESTOR VEHICLES | Individuals and family offices. | Important for properties/projects up to $50M. | Limited | Single asset investments through LLC, limited partnership, and Delaware Statutory Trust structures. | Investors have generally chosen sector-specific strategies. |
| OFF SHORE CAPITAL | Bank deposits, pension capital and wealthy individuals. | Most impact in top tier markets; limited elsewhere. | Limited | Provide in both debt and equity. Focus on gateway cities. | U.S. attracts a disproportionate share of this capital by offering relative stability. |
| OPPORTUNITY FUNDS | Family offices, pension funds, individual investors. | Limited due to uncertain economic outlook | Good | Circling distressed sellers and recapitalization opportunities of existing assets, including those under construction. | Activity is strongest in the most disrupted market sectors. |
| TAX CREDIT FUNDING | Mainly corporate investors, some banks | Important for affordable housing and historic properties. | Limited | Invest equity in affordable housing, community development and historic preservation. | Reduction in corporate tax rates reduced the value of these investments, and market uncertainty has slowed new development. |
| In recent years, the sources of real estate debt and equity have expanded and changed significantly. As a consequence, it is difficult even for real estate finance professionals to fully understand the focus of the many different capital sources. The intention of the "Sources Matrix" is to list all of the active participants in the real estate finance and investment arena. In a sense, it is intended to provide a global view of real estate finance. ALTHOUGH THIS INFORMATION IS PREPARED CAREFULLY, FANTINI & GORGA CANNOT GUARANTEE ITS ACCURACY. |
