SBA and Commercial Finance and Investment News

Here at Centennial Lending , where we do smaller balance loans on all kinds of investor real estate from 1 unit to 100, 500 square feet to 50,000, our credit union commercial rates have hit an all time low. We  have reduced our base 5 year rate to 4.5% and our base 10 year rate to 5% flat for good quality real estate with good liquidity and credit – recent transactions include small office buildings, a 15 unit apartment complex, new construction , and a freestanding retail store.  The reduction of our rates has been dramatic.

And I understand on the life company side, spreads have narrowed to 250-300 over Treasury, which puts 10 year money at 5% for commercial.  And spreads are tighter for multifamily.  Typical agency multifamily is 75-80% LTV for a purchase or no cash out.  Commercial money at life companies is 60-70% LTV typically with 130 or better dscr.

The BANKS in our fair city of Denver are tripping over themselves here to make owner occupied commercial RE loans – I hear rumblings of rates at 4% for 5 year money and one bank bid 1.75% last week on an owner user flex building.  Insanity.

Ladies and gentlemen, these rates will NOT last! The 10 year T is on the way UP as the Greeks pretend to comply with ECB mandates and our unemployment picture improves.  NOW would be a REALLY good time to get started on that refinance or new build, or buy that building.  Take the money and run and if you need some direction email me at tim.thomas@centennial-lending.com or call 303-746-9169.

Here is what my Colleague Lou Barnes, WSJ contributor, mortgage banker and columnist, not to mention Boulderite, had to say: today:

“Gradually improving US economic data and a Greek deal of some sort have relieved immediate financial fears, and so bond and mortgage rates have risen.

The rate increase is proportional to the relief. 10-year T-notes have moved from 1.92% to 2.02%, and mortgages from just under 4.00% to just under 4.125%, roughly like your kid’s fever dropping from 105 to 104.5.

The most reassuring news here is the up-trend in the small business survey by the NFIB. Although its overall optimism is little better than the bottom of recessions going back 25 years, it has been improving each month since August, and only two months since 2007 have had better readings. The weakest internal component has been sales, now the worry fading fastest.

Another legitimate breakthrough: weekly claims for unemployment insurance have dropped again, to 348,000 last week. Wobbling near 350,000 in the last couple of months has been a straight-line decline from the 400,000+ range of the last two years, and is only about 25,000 weekly above what anyone would consider normal. However, everything about this cycle is so abnormal that nobody knows if normalized layoffs will translate in to normal hiring. “

Bottom line — we may have PASSED the low.  Time to get ON THE TRAIN!

Bonds rallied last week, driving the 10 year Treasury back below 2% – down in fact to 1.92%.  This means continuously fabulous rates for those my colleague Mike Cantwell calls the conservative and capable few borrowers.  Rate wars, that’s what we have.  Life companies at mid 3’s for 5 year paper and mid 4’s for 10 year loans (60-65% LTV, stellar lease income stability, please).

Niche lenders – like our credit unions (see my rate sheet at) are providing more and more liquidity for the not-so-stellar deals – or the smaller deals – that do not fit life company strict standards.  And of course we lend to those who do not want a heavy, draconian prepay penalty.  And, oh yes, we do construction loans for new bulls or gut rehabs.  So there’s cash out there, though it lies in unexpected places. See our current rates and programs — bringing cash to the “small” commercial market – at Rate and Program Summary Centennial Lending Commercial Mortgages January 2012

OK on to politics. Is the state of the union is getting stronger, as our President would have us believe?   Not with continuously falling housing prices, 13 million Americans out of work and a 1.3 trillion deficit it is not.   As my friend WSJ writer Lou Barnes said pithily this Friday, just half a day after the President’s speech,  the Fed announced an economy in such peril that its previously unprecedented aid would extend over the horizon.

Go to usdebtclock.org and tell me what you see.  We are carrying at this hour 15.3 trillion in debt.  $48,000 for every US citizen.  $135,000 for every US taxpayer.  And that mountain is going to grow by another $$1.3 trillion this year as we SPEND more that we can possibly TAKE IN. We SPEND 4.5 trillion, we COLLECT 3.2 trillion, we are short and remain so because no one of courage is in the White House and two few occupy the House and Senate. No one wants to tackle entitlements. Reckless spending, that’s the plan.

As the great former senator Alan Simpson said last Friday to the Wall Street Journal, Obama walked away from the solution proposed by his own panel.  He is in Simpson’s words afraid to confront the deficit.  Scared, in fact.  His words, this very wise man from Wyoming, not mine    The $3.9 trillion, 10-year Simpson-Bowles plan included about $2.2 trillion in spending cuts, $673 billion in reduced interest payments and $1 trillion in tax increases.  None of which was mentioned in the State of the Union.

Welcome!

Centennial Lending, whom I represent as senior Business Development Officer, is a credit union service organization owned by 13 credit unions in Colorado and Wyoming.  We lend in Colorado, Wyoming and Nebraska and finance” small” projects from as little as $100,000 up to $5 MM.  We like small retail centers, freestanding retail, office, industrial and retail condominiums, neighborhood centers, office buildings, industrial buildings and of course apartments from 5 to 100 units.   We also finance 1-4 unit rental housing.  We offer a 5+5 fixed rate and a 10 year fixed rate permanent loan, with no prepay penalty.  And construction financing for qualified projects. We also are experts on the SBA 504 and have financing up to 90% LTV for owner-user buildings.

Please click here to download our most recent rate sheet for commercial and multifamily construction and permanent financing:

Rate and Program Summary Centennial Lending Commercial Mortgages January 2012

And here are some of our recent closings

Success Stories by Centennial Lending

Contact Tim Thomas for more information, tim.thomas@centennial-lending.com, 303-746-9169

Yes, I write TWO blogs:  this one at www.sbafinancenews.com and www.coloradoloaninfo.com.