Daniel Palmier is founder, president and CEO of UC Funds. He has
been in the real estate business for more than 25 years as an investment
manager, owner, developer and financier. Palmier believes in cultivating
strong relationships with both senior lenders and real estate partners.
Through The Palmier Foundation, he also is one of the most active philanthropists in the
United States, combining financial resources, education, social services and volunteerism
to improve lives and communities worldwide. Reach Palmier at email@example.com.
Continued on Page 80 >>
Traditional lenders are reassessing their lending criterion to stay competitive within the industry, and decreasing the amount of risk they are willing or able to take on within the various asset classes. As a result, the market for alternative lending has grown and pricing is
now proportionate with that of conventional lenders.
Traditional lenders are still very active in the market, but only for key clients
with the most substantial bank accounts. Many middle-market developers and
investors have been shut out to alleviate risk.
These developers and investors are now looking to partner with nontraditional
lenders whose value exists in their ability to offer nonrecourse loans, quicker
closing time frames and, maybe most importantly, flexibility. Commercial mortgage
brokers who work with these types of clients must reassess the market in order
to grow and maintain relationships.
Sponsors often come to the table with a business plan that, in many cases, will
change because of unforeseen circumstances. Additionally, they may be strug-
gling to find aggressive and competitive loans, with many traditional lenders
hesitant to provide capital.
Funds to complete projects have decreased, so borrowers are looking elsewhere
for financing, seeking out lenders who offer a wide range of future refinancing
options and alternatives. Nontraditional lenders can close loans quickly on good
terms because of their less restrictive nonbank status.
Nontraditional lenders understand that flexibility is key in order to successfully assist investors with closing transactions. A competitive lender must possess
two essential factors: speed and reliability. A lender that exhibits flexibility when
dealing with the ever-evolving needs of an investor will effectively help complete
the acquisition or refinance, and see satisfaction from the borrower.
With capital-asset pricing through nontraditional lenders on the rise, forming
positive and ongoing relationships with lenders and borrowers is integral to a
commercial mortgage broker’s success. By understanding the demands of your
borrower and effectively expressing their need for flexibility to a lender, you may
dramatically increase the value of the deal. The more flexible the lender is willing
to be in negotiations with the investor, the higher the rate of closed transactions.
Today’s market offers no shortage of debt for income-producing assets, and
commercial real estate remains a lucrative investment. For most sponsors, the
biggest challenge right now is finding income-producing assets with equity, or
debt capital for transitional value-add assets.
Hospitality properties are possibly the most challenging asset class to pursue
at the moment, because that sector is being underwritten more tightly. It’s
important to note, however, there is available capital for strong assets in this category, particularly for experienced investors who understand the importance of
determining their financing needs based on the industry’s climate.
78 Scotsman Guide Commercial Edition |
ScotsmanGuide.com | March 2018
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