The flood of new lenders continues unabated and they are all crying for yield and deals.
We like the looks of a number of intelligent real estate savvy re-position/bridge lenders, pref equity and mezz providers that we have spoken to in the last 60 days. The pricing for bridge is coming down - in many cases to the 5% - 6% range but can still price at 8%+ rates. Why? IT DEPENDS!!! We can’t stress enough the beauty contest that goes on to underwrite and price a deal. It’s a real devil-is-in-the-details world out there, but we know how the underwriters think and can size up your deal to the market.
One of the more interesting programs to enter the market is a long-term “mezz like” pref equity player for apartments. They can go over 10-years and set initial pay rates to enhance the sponsor’s yield. All-in rate would be low teens. We have other mezz/pref equity players that can price a little inside of that for lower LTV and a class A assets.
One of the best niche development equity programs that just came online will take modest entitlement risk and sign on a construction loan. This is only for western states and only multi family.
Capital sources are becoming more creative and competitive every day.