PROFESSOR'S CORNER

From the Desk of Professor Eyzenberg
Much like the second quarter, we ended the third with continued optimism.
Despite having one arm tied behind its back (continued lockdown in major states like CA, NJ, NY), the US economy staged an unprecedented (and better-than-expected) comeback during the third quarter, posting a GDP growth rate of 33.1%.
Distress continued to permeate the market on the margins primarily confined to the retail (non-grocery anchored) and hospitality (non-resort) sectors. Capital investors licking their chops for buying opportunities continued to sit on the sideline, while others seeking some measure of return and safety focused on multifamily and industrial. The more intrepid investors gave suburban office a second look as many expected a post-COVID normalcy to include a return to the hub and spoke system for corporate occupiers of space.
Senior debt providers remained disciplined on leverage exposures to most asset class requiring an over-equitization or alternative structured capital to fill the gap. The old stalwarts - mezzanine loans and preferred equity - began to face new challenges from ground lease and C-PACE providers offering cheaper capital, albeit at the expense of senior lenders' risk exposure.
On a personal note, we decided to return to the office for the sake of maintaining business continuity, corporate culture, and our sanity. Though it was different across our various markets (state requirements), for those that found themselves back among their peers it was a much-appreciated return to a semblance of normalcy. New hires were made and integrated into the various teams in manner that would have been impossible in a remote situation. We continue to seek out talented individuals with a yearning for growth, challenge, and human interaction.

- David Eyzenberg (Adjunct Professor at NYU Schack & UM Herbert Business School)

RECENT CLOSINGS

Select completed transactions
$35MM Single Family Rental Project | Development | Myrtle Beach, SC
Structured and placed a first mortgage construction loan to build the initial 100 units of a 130-unit community.
$7.6MM Retail Property | Refinance | Gastonia, NC
Arranged a first mortgage permanent loan to refinance a 63,937 sq. ft. grocery anchored retail center.
$9MM Land | Recapitalization | Austin & Kyle, TX
Structured a cross-collateralized fixed-rate bridge loan to fund predevelopment costs on two land parcels intended for an industrial distribution center and single-family homes in Austin and Kyle, TX.

PROPRIETARY CAPITAL SOLUTIONS 

Spotlight on Select Programs
Eyzenberg & Company expands its product offering to include FHA-insured, low-cost, non-recourse financing for the purchase or refinance of existing multifamily rental housing projects. 

HUD 223(f) - Acquisition and Refinance of Market Rate, Affordable, and Subsidized Multifamily Projects

Eligible Property Types:
  • Existing Stabilized Market Rate
  • Affordable
  • Subsidized Multifamily and Mixed Use
Transaction Type:
  • Acquisition
  • Refinance
Maximum LTV:
  • Market Rate: up to 85% without cash-out / up to 80% with
Term / Amortization:
  • Up to 40 years based on 75% of remaining useful life
  • Fully amortizing over term
Interest Rate: 
  • Fixed rate
  • Currently: low to mid-2's
Personal Liability:
  • Non-recourse subject to fraud and misrepresentation carve-outs
Prepayment:
  • Flexible, based on market conditions
Secondary Financing:
  • Allowable, subject to FHA criteria
Commercial Space:
  • Up to 25% of net rentable area and 20% of Effective Gross Income
Assumability:
  • Yes, subject to HUD and Lender approval

CURRENT OFFERINGS

Select Deals in the Market Seeking Capital
Bridge Loan (Leasehold)
$30MM | Hotel | Recapitalization | Miami, FL
Construction Loan
$65MM | Mixed - Use | Renovation | Fort Worth, TX
JV Equity
$10MM | Multifamily | Acquisition | Denver, CO
Construction Loan
$75MM | Hotel | Development | Orlando, FL
JV Equity
$6MM | Office | Acquisition | Reston, VA
Bridge Loan
$12MM | Office | Acquisition | Reston, VA
Select Deals Seeking Developers
428-Unit Leasehold Development
$97MM | Multifamily | Development | Miami, FL
400-Unit Leasehold Development
$62MM | Multifamily | Development | Bonita Springs, FL
120-Unit Leasehold Development
$48MM | Multifamily | Development | Greenwich, CT

RECA CORNER

Real Estate Capital Alliance (RECA) Quarter 3 Production Statistics. 

Eyzenberg & Company is a proud member of the Real Estate Capital Alliance (reca.us). RECA members arranged over $4.8 billion in capital in 2019. Below are RECA production statistics for Quarter 3 of 2020.