Mag Mile Capital Covid-19 Capital Markets Update
CHICAGO – We are in unprecedented times as we tackle Covid-19. Capital Markets are not functioning as they do during normal times. Our capital partners in the credit markets are grappling with the uncharted nature of these rapidly developing market movements.
Committees are watching closely and changing their credit and investment guidelines as new information becomes available. CMBS lenders are cautious to quote new stabilized deals and are selectively closing outstanding transactions depending on the deal quality and relationships. CRE CLO (lower rate debt fund) lenders are also temporarily pausing or only selectively quoting new deals.
On the flipside, debt funds with discretionary capital, private and public REITs, regional banks, local banks, credit unions, life insurance companies with strong balance sheets continue to be open for business. With increased government guarantees, SBA lending will also be very active for qualified owners for the foreseeable future.
The lending community is busy fielding calls from their existing borrowers, business owners, and commercial real estate owners asking for help. Most of our capital partners are working from home and with a massive information overload, we are experiencing lower productivity from normal levels and as a result of this and increased volume of inbound inquiries, we are experiencing slower turn on new quotes.
Across Mag Mile’s seven origination offices, our origination team is actively placing existing transactions and originating new transactions. Most new hotel transactions are put on hold right now. Hotels and retail will be challenging asset classes in weeks and months ahead, but our team is also diligently managing to bring ‘actively signed up’ transactions to the closing table. There are pockets of capital that remain available for strong deals and good sponsors. We remain open for business and are working hard to get good quality deals done at attractive interest rates.
Lastly, please do your part to flatten the curve. The more we stay indoors, the sooner we (as a country) can get through this challenging time. Capital markets will return to normalcy once we see more reassuring data on new coronavirus cases and businesses can, and will, reopen.
About Mag Mile Capital
Chicago-based Mag Mile Capital is a full-service, commercial real estate mortgage and investment banking firm. The boutique firm offers preferred access to best-in-class debt placement, equity arrangement, tax credit syndication, real estate brokerage and advisory through a high-touch, disciplined approach that leverages its extensive lending relationships and deep-rooted client and equity sponsors. During the past 27 years, team members have collectively funded over $8.5 billion in debt, equity, tax credit and mezzanine financing for hotel, multifamily, office, retail, industrial, healthcare, self-storage and special purpose properties throughout the United States and the Caribbean. For more information please visit www.magmilecapital.com.