Insights for Commercial Real Estate Lenders

Navigating Low-Income Housing Tax Credits
for Successful CRE Investments

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.