Net lease properties pique lender interest

Commercial lending may become more competitive this year.

The lending situation may be making a transition for some commercial real estate properties, and property management companies interested in buildings with net lease assets may receive some benefits.

There was an increase of lenders with commercial market interests in recent months, and companies interested in commercial mortgage-backed securities may benefit from this, as net lease transactions are a more popular lending option, according to National Real Estate Investor. Specifically, the properties that experience some of the most significant benefits involve triple net properties.

The increase in lenders working with CMBS loans was partly due to fewer international economic concerns, namely the debt crisis in the eurozone, the news source noted. CMBS lenders also experienced heightened levels of competitive ability in recent months, as interest rate drops were more easily accomplished compared to other lenders, such as portfolios.

Despite the improved situation for CMBS lenders, life insurance portfolios and other financial institutions may still see a gain in lending levels, the news source reported. Much of this is due to the continued improvement of the overall commercial real estate industry. Even with this in mind, CMBS lenders may be successful.

General properties are typically more easily able to receive financing, Bill Hughes, senior vice president and managing director for Marcus & Millichap, told the news source. This is due to the building being easily converted for a specific purpose. On the other hand, specific purpose buildings can be more difficult.

Financing reaches a pinnacle when dealing with net lease transactions, Hughes explained to the news source. While traditional financing can be within a range that reaches 75 percent, net leasing options can improve this to as much as 90 percent, depending on some factors.

CMBS delinquencies continue fall in early 2013
While the lending situation for commercial property managers is improving, the level of delinquencies is subsiding.

The total rate of delinquent CMBS loans for February was 9.42 percent, according to the February 2013 U.S. CMBS Delinquency Report from Trepp. This figure was 15 basis points lower than the previous month's figure. Since the all-time high delinquency rate was recorded in July, the figure dropped 92 basis points.

There was also a decline in loan resolutions during the month, as it fell to less than $1 billion, the report added. This figure was $1.2 billion in January.

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