News

Regulatory changes and market movements have dominated the news cycle for capital markets this month, so we’ve outlined the top items you need to know for what lies ahead in 2016.

Present: Interest Rate Hike
The U.S. economy entered a new era this week with the Fed’s decision to increase short-term interest rates for the first time in nearly a decade. This move did not come as a surprise to the market.

In 2015, we saw a continued low interest rate environment, the implementation of Basel III regulations and a multitude of new entrants to the market in all areas of the capital stack. Looking ahead at 2016, we will see additional constraints put into place on capital flows. These increased regulatory stipulations and constraints on capital will effect leverage and pricing for commercial real estate and have borrowers seeking non-regulated sources of capital to fill the gap.

With holiday decorations popping up around town, we are reminded that year-end is just around the corner. While many traditional lending sources – banks, life companies and agencies – have their hands full, active private money lenders are well-capitalized and can fund your year-end acquisition opportunities. These lenders are hungry to meet their own lending goals and have quick-close capabilities to fund deals in as little as two weeks. Dekel Capital has identified a high leverage balance sheet lender that can execute your next financing by year-end.

Fed Delays Rate Increase Bringing Continued Stability and Low Rates To CRE
For the past several months, the commercial real estate industry has been awaiting the decision that would impact not only its bottom line, but also its momentum towards a stronger recovery. While labor markets have strengthened, downward pricing pressure from the decline in oil and commodities has kept inflation below the Federal Reserve’s target. In fact, the Fed took the path of least resistance and voted to keep interest rates at 0.25 percent as inflation remains below the two percent mark.

The beginning of 2015 has been eventful for the real estate capital markets. While the jury is still out on what comes next, here are the top five indicators of what’s been and what’s coming:

GE Capital exits the lending business
In April of this year, GE exited the banking business by spinning off GE Capital, the higher risk $500 billion finance business that was 42 percent of company profit last year.

We had a great time at the Bisnow Los Angeles Capital Markets Summit and enjoyed the Bridge & Mezz update moderated by our very own, Shlomi Ronen.

Pictured above from left to right:

Shlomi Ronen, Managing Principal |Dekel Capital

Larry Grantham, MD | Calmwater Capital

Scott Shepherd EVP |OneWest Bank

Jeff Friedman Co-CEO |Mesa West Capital