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August 27, 2019

Insights for Commercial Real Estate Lenders

By Partner ESI
Insights for Commercial Real Estate Lenders
Navigating Low-Income Housing Tax Credits
for Successful CRE Investments
The Low-Income Housing Tax Credit (LIHTC), created to encourage private equity investments in the development of affordable housing, is the most successful and longest-running national affordable housing incentive program. Despite the enormous opportunity it has created, its requirements for stakeholders, risk management compliance, and documentation are incredibly complex. In this GlobeSt article, JR Lephew discusses strategies for navigating those complexities and successfully closing your LIHTC deal.
Keep Your CMBS Loans on Track with Remedial Cost Estimates
In the last few years, a significant number of CMBS deals have been forgoing a Phase II ESA in lieu of alternative options, such as holdbacks or environmental insurance. In this article, Partner’s Jenny Redlin describes how stakeholders have turned to Remedial Cost Estimates (RCE), which allow them a method to better assess the potential risk scenarios of contamination on a site and help streamline the securitization process through reduced subjectivity. In a recent study of 1,200 Phase II investigations, Partner’s Kathryn Peacock found that 1 out of every 2 sites tested (53%) had contamination above regulatory action, while 76% had some level of contamination. Since the likelihood of remediation is high and its costs can be significant, as seen in the study’s average RCE table, procuring a quality RCE which provides a tangible likely worst-case cost scenario is important.
Construction Lending Outlook: Strong Sentiment 
and Fundamentals Amid Growing Uncertainties
Many lenders have turned to construction lending in the search for increased yield, but increasing uncertainties have made it harder to predict and manage construction risks. Development is still thriving, and there is no shortage of construction projects available for financing; however, developers and lenders are becoming more cautious. Strategies to control spiraling costs, completion delays, and other sources of default have become even more important in underwriting and managing new construction loans. Click here for Bill Tryon’s full construction lending market analysis.
Fannie / Freddie Due Diligence: Four Things to Know
After a record year for agency lending, Freddie and Fannie have been too busy with loan originations to make many changes to their guides. However, there are some minor changes worth noting. Partner’s Technical Director of Agency Lending, Drew McCreery, provides a review of the changes along with a couple of timely reminders about the nuances of agency due diligence requirements in this post from GlobeSt.com.
Partner is honored to be on Engineering News-Record’s 2019 ENR Top 200 list of Environmental Firms for the 7th straight year, moving up 11 spots to #100. We continually strive to be a top resource in helping our clients manage environmental risk and achieve their business goals. Across the industry, Partner is recognized for its expertise in conducting Phase I Environmental Site Assessments.

About the Authors

Partner ESI

Partner ESI

Founded in 2007, Partner Engineering and Science Inc., is the leading provider of engineering, environmental, energy, and construction consulting for the commercial real estate (CRE) industry. Touching 1 in 5 CRE transactions in the U.S., Partner is widely recognized as the largest and best provider of third-party physical due diligence reports, including Phase I Environmental Site Assessments, Property Condition Assessments, Seismic Risk Assessments, Zoning Reports, ALTA Land Title Surveys, and Construction Risk Management. Partner’s connectedness to the CRE market gives it an unparalleled view into CRE trends and risk management insights. Partner also provides a full suite of consulting services to support the entire real estate lifecycle, including: Geotechnical Consulting; Building Systems Consulting; Capital Management and Project Implementation Support; Environmental Health & Safety Consulting; Energy, Sustainability & Resilience Consulting; and Site Civil Engineering. With a responsive approach scaled for speed and agility, Partner helps clients manage risk, make smart investments, optimize asset performance, and win at their real estate investment strategies. Based in Torrance, Calif., Partner has over 1,400 employees in 40 offices around the globe.

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