Conduit programs can be accessed through banks as well as finance companies. Life company loans can be as low as 1.10 times debt-service coverage, even lower if the life company really wants the transaction. Typically, life companies are seeking only newer properties with an excellent history. Quality management and maintenance definitely have roles to play in the lending process. Many property managers go into underwriting and say we'll make these improvements when you give us the loan.
Experts say the amount of capital chasing office building projects is staggering.
Banks, conduits, life insurance companies, pension funds, and now even mortgage REITs are providers. Some lenders, such as the life insurance companies, will only consider Class A properties in the top markets. Generally, though, borrowers seeking a first mortgage can typically get 30-year amortization schedules and mortgage spreads as low as 150 basis points over the corresponding Treasury yield. Borrowers, especially ones with large, well-managed properties, will probably not be required to fund high levels of reserves. The property manager's role in an office building refinancing can be key.