Real Estate Forum - January 2013

On one hand, Walker & Dunlop’s announcement is a story of a company pushing hard, and successfully, for growth. It has posted significant movement in the league tables over the past year, not to mention growing originations in the office, retail and hotel categories.

On the other, its projection for increased originations is every commercial real estate company’s story this year.

2013, from all perspectives, will be the year that lending in the sector will truly hit its post-crash stride, with borrowers finding capital to finance growth—as well as refinance old debt.

This was the emerging story line in 2012, but 2013 will unfold with an additional twist, observers say: lenders, especially as they compete for the highest-quality assets, are blurring lines between their traditional products and asset classes to better compete.

“We are seeing a new level of aggressive-

“CMBS has become a highly
competitive channel for
borrowers looking for low-
leverage financing. I think
they’ll give the insurance
companies a huge run for
their market and be very competitive on
high-quality deals this year.”

ness and flexibility among lenders in all categories,” says Philip Mudd, a Washington, DC-based broker with Cassidy Turley.

Commercial banks are offering construc-
tion loans with lengthier loan terms. Life
companies are offering construction-per-
manent loans and pushing into equity deals
as well. CMBS has become so price com-
petitive that it is targeting the next fron-
tier—more flexible noneconomic terms
designed to better compete
with life insurance companies.
And the agencies? They will
fight to retain their market
share as other lenders get
more aggressive. “The agen-
cies will continue to be signifi-
cant participants but I do
think they will lose some mar-
ket share to other capital
sources that are trying to put
money to work,” says Berkadia
Commercial Mortgage CEO
Hugh Frater, based in
Horsham, PA.