Real Estate Financing Market Observations – Summer 2018 Edition
Atlanta, Georgia – Leisure Financial Group (“LFG”) is an experienced mortgage brokerage firm that structures, arranges, and services loans in the real estate industry specializing in traditional assets through our subsidiary LFG Commercial Real Estate (“LFG CRE”) as well as specialty assets in Hotels, Resorts, Golf Facilities, and Marinas. LFG CRE focuses on commercial real estate mortgage originations in Office, Industrial, Retail, and Multi-Family as well as offering franchise lending for Fitness Centers, Restaurants, Retail Shops, and Self-Storage Facilities.
Our track record of success and over 100 years of combined lending experience has created strong relationships with a variety of lenders from Traditional Banks, Life Insurance Companies, and CMBS to provide clients with solutions that achieve the best financial terms available.
What LFG Is Seeing In The Debt Markets:
Hospitality: The lending market remains strong for existing properties. However, most lenders are being cautious on expanding hotel loan portfolios as they watch for signs of a reduction in REVPAR. Hotel construction financing is available but is limited to experienced operators with top Flags and excellent locations.
Resorts: Resorts, where lodging is the main driver of business, have seen interest from lenders. The increased risk associated with food & beverage and other non-room revenues is reflected with higher spreads than traditional hospitality loans. Construction financing is challenging.
Golf: Loan opportunities for stabilized golf properties is growing. Interest rate spreads remain elevated and select lenders are offering conservative LTV’s. Under-performing or “proforma” properties have limited debt opportunities.
Marina: Marinas have seen increased interest from select lenders. Industry consolidation and overall slip occupancy has improved and a strong economy has increased investor interest in this asset class. Rising values are helping to drive lower spreads and higher LTV’s.
Office/Industrial/Multi-Family: These “core” CRE products continue to be favored by Traditional Banks, Life Insurance Companies, and CMBS lenders. While overall rates have increased with rising LIBOR and Treasury Rates, spreads remain tight. An increasing wave of private mortgage debt is entering the market seeking returns and this demand for CRE as an investment has driven sales and values for non-stabilized properties in these asset classes.