The coronavirus pandemic “will likely result in an unprecedented period of economic instability and recession that could last as long as three years,” according to Ethan Penner, co-founder and managing partner of Mosaic Real Estate Investors. Penner started originating commercial mortgages for securitization following the savings and loan bailout in the late 1980s, so he’s been through at least three economic cycles.
Economic uncertainty is changing lending practices, but that doesn’t mean there isn’t financing available for commercial real estate in Los Angeles. The trick, though, is finding that financing and getting the right terms. “Whatever underwriting people were using in January and February has clearly changed now,” said Kevin Shannon, co-head of capital markets at Newmark Knight Frank. “The loan terms — they are getting so dramatically different from what they were.
In violent storms, cracks in vessels suddenly reveal themselves. The same can be said for the nation’s commercial mortgage-backed securities market, as it faces a month of wider spreads and liquidity fears. The pain points emerging are not a surprise to Mosaic Real Estate Investors’ Ethan Penner, who is credited with creating the CMBS market for commercial real estate some 30 years ago. He thinks the whole system needs an update.
One would be willing to wager that Las Vegas, a town that lives and breathes hospitality, would be doomed in a total shutdown from a global pandemic. But, as it turns out, that’s a sucker bet. In a city that likes the gamble, a number of the major Las Vegas property owners and investors have been more conservative than in the past,
California, like many other states, has shut down its economy to slow the spread of the coronavirus, causing heightened volatility in every market and uncertainty as to how long it will last. Executive orders and unprecedented measures from state and local officials are mounting almost every day, adding layers of consequences to real estate markets and the rest of the economy.
A new housing development aimed at UC Merced students is expected to be the closest off-campus housing alternative for the ever-expanding university. Called “Merced Station,” the development at the corner of Yosemite Avenue and Lake Road is set to include 15 residential buildings with 270 units and 885 beds — plus retail and dining spaces.
Vicky Schiff co-founded Mosaic Real Estate Investors in Calabasas, CA, and took a financial and professional risk in doing so. Making that bet to bring a new lender into the marketplace in turn has provided jobs for others and capital for borrowers to fulfill their own goals that may encompass developing an apartment for people to live in, a hotel for people to visit, places to shop, a residence for students, or a facility to distribute products.
“As Ginger Rogers said, ‘I do everything that Fred Astaire does, backwards and in heels,’ ” said New York City Deputy Mayor Vicki Been, who opened Commercial Observer’s Women in Real Estate conference on Nov. 13.