FLOATING-RATE CMBS LOANS HAVE RE-EMERGED.
SO HAS INTEREST-ONLY FINANCING.
IS CMBS FINALLY SHEDDING ITS RIGID, USER-UNFRIENDLY WAYS?
Afunny thing happened at the start of this year when Campus Evolutions tried to close on Freddie Mac financing for the purchase of a four-property student housing portfolio: it couldn’t. At the last minute, questions arose about one of
the assets and its cash flow. Stumped and frustrated, Campus Evolutions looked for an
alternative and, because this wasn’t 2009 or 2010, it found one in the CMBS market.
Miami-based SL Capital, an exclusive correspondent of Cantor Commercial Real
Estate in New York City, was able to quickly—in 18 days, no less—put together a
$33.5-million collateralized CMBS loan at a fixed rate and 10-year term that amortizes
over 25 years and has 24 months of interest-only payments. The purchase price was
One of the parties involved decided one of the properties wasn’t preleased enough
and started retrading the terms, SL Capital’s co-chairman and CEO, Constantine
Scurtis, explains. “We are able to do it because our platform has a lot more flexibility
in terms of our comfort level with current income and we are less fazed about pre-leasing levels.”
By Erika Morphy