News

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

In January 2014 Dekel Capital launched Dekel Strategic Investors (DSI), a JV-equity platform to provide equity capital to real estate developers engaging in multifamily, senior housing, student housing, and retail development projects.  Over the past 18 months, the DSI has invested over $65 million across nine projects throughout the United States.  DSI will continue to fill the recognized gap in the capital markets for equity investment between $3 and $10 million and is targeting a total of $100 million of JV-equity investment by year end.

Max Friedman, SVP at Dekel Capital, was quoted in PrivcapRE’s article Mezz Debt’s Steady Advance in Risk by Christopher O’Dea on March 2, 2015.

Read the full quote below:

“More players are entering the mezz space, resulting in increased
competition to win deals,” says Max Friedman, senior vice president at
Dekel Capital, a Los Angeles–based merchant bank focused on
commercial private equity real estate and complex financing structures.

In recent months Dekel Capital has been actively arranging high-leverage loans and financing structures (up to 90% LTC, non-recourse) for clients acquiring value-add and core-plus deals nationwide. We’d like to use this opportunity to share with you some of the market intelligence we’ve gathered.

This financing can be sourced wholly from a single source, debt fund underwriting to a CLO execution, or by placing a senior loan plus mezz/pref equity. These capital sources are focused on business plan execution across all property types and are not constrained by bank leverage metrics,