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Newmark® Completes $726MM In Commercial Mortgages During 3Q2017

November 8, 2017

Total Current Production for 2017 Reaches $1.975 Billion; Will Exceed $2 Billion by Year End as Commercial Lending Markets Remain Active

SAN FRANCISCO–(BUSINESS WIRE)–Newmark™, the largest independent commercial mortgage banking firm in the western U.S., closed $726 million of commercial mortgages across 80 unique transactions in 3Q2017. This brings the company’s overall production to more than $1.975 billion for the first 9 months of 2017. Active property types during the third quarter include multifamily, office, retail and self storage assets; with the company’s Phoenix, San Francisco and Los Angeles production offices showing the highest transaction volumes during the period.

Newmark completes $736 Million in Commercial Mortgages during 3Q2017; Set to exceed $2 Billion by year end 2017.

“Commercial mortgage lending continues to be healthy in 2017, with rates remaining at historic lows compared to the projected increases anticipated earlier this year,” said Robert Slatt, principal with Newmark. “Notably, over the past 12 months, we have seen a steady amount of construction to permanent financing placed with our correspondent lenders. These lenders are replacing banks as a primary source for construction capital due to new High Volatility Commercial Real Estate rules limiting banks in this arena. These loans spread the risk of new construction over extended terms, ensuring new projects can still secure debt at the reasonable rates no longer available from traditional banks.”

Slatt pointed to the following trends as worthy of consideration at the close of 3Q2017:

  • Volume – Commercial mortgage finance demand remains healthy and consistent with Newmark’s predictions for 2017 quarterly production. Newmark will exceed $2 billion in annual production in 2017 for its sixth year in a row.
  • Construction to Permanent Loans – As traditional banks adjust to the new Federal HVCRE banking regulations, construction financing from life insurers, pension funds and other non-banking institutional sources is on the rise. Newmark’s correspondent lenders have placed nearly $500 million of construction to permanent loans during the past 12 months for development projects in the retail, multifamily, self storage and mixed use asset classes.
  • Office – Office assets showed a strong interest from lenders looking to place commitments in the Western markets during 3Q2017. Allocations remain available for assets across the spectrum of lenders (banks, life insurers, pensions funds, private equity) and loan types (bridge, permanent, CMBS) demonstrating a broad appetite for allocations in this asset class.
  • Retail – The most challenged asset class in today’s market continues to receive allocations as the lenders most familiar with retail remain confident in funding well positioned properties. Those with the least experience in retail continue to reduce their portfolio exposure.
  • Self Storage – Appetite for allocations into this specialized property type remain healthy with Newmark’s correspondent lenders experienced with underwriting this asset class.

 

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