The Charlotte Regional Commercial Real Estate Capital Conference

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2011 NC-CCIM Charlotte Commercial Real Estate
Market Forecast Financing for Commercial Real
Estate
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BBT

• Vital Statistics
• Best Bank in Town Since 1872
• Headquartered in Winston-Salem, North Carolina
• One of the nations largest banks
• NEVER recorded a quarterly loss during the Great
  Recession
• Asset base of over 157 Billion
• One of the first banks to repay TARP
• One of the first banks permitted to increase its
  dividend
• Healthy, hungry, and ready to lend

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Grandbridge Real Estate Capital

• Vital Statistics
• Headquartered in Charlotte, North Carolina
• Subsidiary of BBT
• One of the nations largest commercial mortgage
  bankers
• Closed 3.1 billion in financing in 2010
• Servicing portfolio of 24 billion
• 26 production offices in 16 states plus the
  District of Columbia
• 30 CCIMs on staff

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Grandbridge Real Estate Capital

• SERVICES
• Permanent Loan Placements
• Fixed Rate or Floating Rate
• Acquisition/Interim Bridge Financing
• Mezzanine Financing
• Preferred Equity
• Developmental and JV Equity

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Grandbridge Real Estate Capital

• Freddie Mac Seller/Servicer
• Fannie Mae DUS Lender
• MAP and Lean Approved HUD Lender
• Insurance Company Correspondent
• BBT Real Estate Funding proprietary bridge
  lending platform
• CMBS origination and servicing relationships

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Grandbridge Real Estate Capital

• Charlotte Production
• 8 People
• 2 CCIMs 1 CFA 1 CPA 1 MAI
• 400 Million in 2010
• 1.8 Billion Past Five Years

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• MARKET

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2007 -- 502 Billion of CRE
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2009 -- 82 Billion
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2010 -- 110 Billion
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2011
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• You CAN finance
• multifamily and commercial
• real estate!!

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Lender Types Active Today

• Insurance companies
• Agencies (Freddie Mac, Fannie Mae, FHA/HUD)
• Bridge lenders (BBT REF, others)
• Mezzanine lenders
• Preferred equity providers
• Banks (BBT)
• CMBS Lenders
• Non-traditional lenders

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Loan Types Available Today

• Immediate funding interim and permanent loans
• Non-recourse 1.5 Million and up.
• Acquisition, refinance, construction takeout
• Fixed and variable rate
• Bullet or self-amortizing
• 3 to 20 year terms (30-40 for multifamily)
• Amortization 15-30 years with some 30- year
  schedules (FHA 35 40 yrs) and limited
  interest-only

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Loan Types Available Today

• Forward commitments are returning (6-12 months)
• Credit tenant lease (CTL)
• Acquisition / bridge loans
• Mezzanine and preferred equity
• Construction financing
• Construction / Permanents under discussion

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• CHARACTERISTICS

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Loan Characteristics

• Borrower continues to be the key
• Primary, secondary and tertiary markets
• Four major food groups PLUS
• Fundamentals must all be in place
• Amortization continues to be important

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Loan Characteristics

• Underwriting
• Submarket vacancy or actual
• Above-market rents may be adjusted downward
• Market and U/W cap rates are being used
• LTVs range 60 80
• Collections, debt coverage and debt yield
• 1.20 - 1.45x DCR
• 9 -- 12 debt yield (NOI divided by loan amount)

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CMBS Structuring

• 5 million minimum size range, but can go lower
• 4 food groups PLUS will go to smaller markets
• 70 -- 75 LTV
• 1.25x DCR
• 5 and 10-year term 30-year am lock rate at
  closing
• Lock box (MAYBE already softening) escrow for
  taxes, insurance, reserves
• May or may not reserve for TI and commissions

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Permanent Rates 3/28/11

• 5-year money in the 4s to 5s (T 2.19)
• 7-year money in the 4s to 5s (T 2.85)
• 10-year money in the mid-5s to low 6s (T
  3.45)

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Conclusions

• More capital sources returning to market
• LT debt more than twice the availability of 2010
• Underwriting moving up the LTV, DCR curve
• Pricing getting more attractive/competitive
• Equity requirements greater and new construction
  will slowly return
• CALL GRANDBRIDGE and BBT !!!