Monthly Archives: March 2017

Ep. 122 Livingston Hessam: What You Need to Know About the State of Mortgage Banking and Real Estate Lending

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mortgage banking and real estate lendingIt’s a new year and change is in the air. With financial regulation changes sure to come and the recently announced Federal interest rate increases, it’s no wonder mortgage banking and real estate lending is hot on investors’ minds.

This episode, we have Livingston Hessam, who just returned from this year’s Mortgage Bankers Association Commercial Real Estate Finance and Multifamily Housing Convention & Expo.

Listeners will remember Livingston from episode 70, in which he gave us a recap on multifamily mortgage banking and real estate lending from the 2016 conference. Livingston is Vice President of Walker & Dunlop‘s Tampa office. Livingston brings over 12 years of experience in real estate lending and finance solutions to Walker & Dunlop, which just celebrated it’s 80th anniversary.

Livingston offers up a recap of the 2017 CREF/Multifamily MBA Conference and discusses key themes from the past year and the current state of mortgage banking and real estate lending.

What’s In Store for Mortgage Banking and Lending

Agency Annual Caps

  • Fannie Mae & Freddie Mac each allocated $36.5 billion for 2017 (same as 2016)
  • Certain loans and portions of loans are excluded from the cap (i.e. affordable and green/energy efficient)
  • Fannie Mae & Freddie Mac multifamily production totaled over $110 billion in 2016.
  • Fannie up 30%, Freddie up 20% from 2015
  • Expected to capture 40% of total multifamily volume for 2017 ($50-55 billion each)

Commercial Mortgage-Backed Securities (CMBS Loans)

  • Risk-retention regulations put in place in 2016, narrowing amount of CMBS lenders
  • Post-election stability, but more selective lending market
  • CMBS lenders ramping up bridge-lending

10-year Spreads

  • Life-insurance (50% leverage and under): 125-135 range
  • CMBS (75% leverage): 250-280 range
  • Agency (80% leverage): Low 200s range
  • Federal interest rate sees .25% increase
  • Expected to increase to 2.75-3% by end of year

Hot Topics

  • Trump Administration
    • Tax reforms
    • Dodd-Frank roll-backs
  • Retail lending
    • Publix most active retail buyer in FL
    • Grocery chains are buying out plazas after lease terms or taking right of first refusal on new lease terms
    • Reduced supply of grocery-anchored retail
    • Strong retail appetite for real estate lenders

Investor Resources

  • In addition to his V.P. role at Walker & Dunlop, Livingston is President of the Society of Real Estate Professionals (SOREP). Formerly the Tampa chapter of University of Florida’s Bergstrom Council, SOREP hosts networking events and seminars to professionals and gives back to Florida universities. SOREP focuses on all aspects of the real estate industry and is open to all. Click here for more info.
  • Walker & Dunlop offers comprehensive real estate financial solutions for all income-producing properties. For more info, visit Walker & Dunlop website.
  • To contact Livingston directly, click here.

 

 

Ep. 121 Frank Hearne & Beverly Birkitt: Using Mitigation Banks for Wetland Development and Investment

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mitigation banksFlorida has a high density of rivers, lakes, swamps and marshes that are generally protected from development.  This has led many investors to wonder how much land is actually available for development. What many investors may not be familiar with is the concept of mitigation banks. Mitigation banks allow for the development of wetland areas that ordinarily would not be usable for real estate development.

Florida environmental lawSo what exactly is a mitigation bank? How does it function and how can they serve investors and developers? Our guests this week are two experts in the field of environmental law and the designation and use of mitigation banks.

Listeners should remember Frank Hearne. Frank is a shareholder for Mechanik, Nuccio, Hearne & Wester, P.A. He was also one of Invest Florida’s first guests! His firm is one of the state leaders in environmental and land law. Beverly Birkitt, of Birkitt Environmental Services, Inc., has over 35 yrs. experience in the environmental field, with a focus on wetland litigation and litigation banking.

This episode, Frank and Beverly cover the ins-and-outs of using mitigation banks for wetland development and investment.

Mitigation Banks

  • Spec wetland approved for future mitigation
  • Allows for more usable property for development
  • Exchange wetland set for development with wetlands that will be improved upon to compensate
  • Must be in the same hydrological zone as wetland to be developed (water basin)
  • State sets basin boundaries

Developing Mitigation Banks

  • Wetland landowners can develop mitigation banks
  • 100-10,000 acres usually
  • Market demand in wetland area is critical
  • Polk County strong mitigation bank market
  • Mitigation banks must improve, not just preserve wetlands
  • Mitigation bank credits based on evaluation of improvement, not land size

Hot Mitigation Bank Markets

  • Tampa Bay Basin
    • In need of freshwater wetlands
  • Coastal areas
  • Orlando/I-4 corridor
  • Former agricultural lands

Risks for Mitigation Banks

  • Feasibility
    • land, permitting, construction, management
  • ROI tough to predict

Contact

  • If you have land that you believe is eligible for a mitigation bank, let Beverly know! Beverly can be contacted through her website: www.birkitt.com or by calling      (813) 259-1085
  • For mitigation bank questions and for more info on other types of mitigation banks, contact Frank by email at frank@floridalandlaw.com or call (813) 909-7400.

Investor/Developer Resources