Loan Comps are Useless, but Financing Comps are not.
Monday, October 31
The real estate industry relies heavily on comparable properties (“Comps”) to underwrite and value properties. The two most common types of comps are sales comps and lease comps. Sales comp - the price of a consummated sale transaction on an absolute, per square foot, per unit, or cap rate basis ...
$1 Billion of commercial mortgage data
Thursday, September 01
Our financing marketplace just passed one billion dollars in closed transactions, which sounds like a lot. Is it? Actually, for commercial real estate finance, it’s a relatively small number. StackSource still has less than one tenth of one percent market share in commercial mortgage origination....
The Weight of a Term Sheet
Wednesday, August 10
An internet search tells me that the average weight of a sheet of paper is 0.1696 ounces. That means that a commercial mortgage term sheet, which is typically two pages long, would physically weigh about one-third of an ounce when printed. But what is the real weight of a term sheet? A friend in ...
Net Lease 101: Credit Grade Tenants
Thursday, July 28
One of the easiest pieces of underwriting in the commercial real estate industry is when a credit grade tenant signs a long-term net-lease agreement. If Starbucks promises to rent your property for the next 15 years, you can literally take that to the bank. That’s because Starbucks is a “Credit ...
Why we underwrite vacancy for a fully occupied building
Friday, June 10
Leasing out the entirety of a building is a great accomplishment. You could even consider reaching full occupancy as the building’s destiny. After all, we don’t build buildings to leave space vacant. So why, when you show up to a lender requesting financing for a 100% occupied building, would th...
Lenders don't like empty buildings, they like strong sponsors
Monday, February 08
I don’t want to throw anyone under the bus so I will crop the below post, but it’s not uncommon to see a post in real estate investing forums or on social media that goes a little something like this: If I see a post like that, and I have 30 second to spare, I may respond with something like: I d...