IT IS LITTLE SURPRISE THAT UNDERWRITING HAS
GOTTEN MORE CONSERVATIVE DURING THE PANDEMIC,
BUT DEALS ARE STILL PENCILING IN.
BY ERIKA MORPHYLast August a multifamily property went on the mar- ket in Los Angeles with cash-flow issues that would have made an underwriter pause even without a pandemic underway.
There were five vacancies and seven additional tenants
weren’t paying rent due to the pandemic. Income in the
property was completely off, according to Mike Hanassab,
a senior director at James Capital Advisors, who was mar-
keting the building. The building sold in an off-market
trade to a buyer that was not concerned about the loss of
income and who was able to secure a 70% loan-to-value.
If it had gone to market, it could have traded for about
$500,000 more, Hanassab speculated.
In this case it is unclear exactly what made the underwriter sign off on the deal, but Hanassab’s business partner, Elliott Hassan, has his ideas.
“Every property is a case-by-case situation, based onlocation as well as operations and rent collections.
AS PANDEMIC CONTINUES