Get your Francs ready

I came across this interesting article in the WSJ about how the Swiss Government is ready to lift their prohibition on foreign ownership of real estate in Switzerland. The article deals with possible impact on property prices and chances for more development. It highlights a truism that the government can quickly change the value of real estate by changing the rules of the game. -DW

Are life companies ramping up lending?

Most properties We buy are financed first through a community bank. When the time is right and assuming a deal is large enough we’ll try to get non-recourse debt either through a Life Insurance Company or a Conduit Lender. As most of you know, Conduits have practically dried up and their rates are way too high right now (around 7.75% compared to 5.25% for Prime and 6.25% for Life Companies). Many have predicted that now Life Companies have the non-recourse debt market to themselves they’d increase the amount of deals they’d do. Some are and some aren’t. This article from Co-Star talks about this subject in more detail. -DW

Birmingham Business Journal

Please read a very nice article written about our company. One correction however, Len is quoted as saying, “We don’t partner in fees, we share with other investors,” what he meant to say was “we don’t participate in real estate fees” i.e., we let the broker who brought us the deal keep all of the fee. -DW

Good sources for economic and interest rate predictions:

If you’re like me, you try to look into the future to see where our economy and interest rates are heading. At Shannon Waltchack we own multiple properties, all with different mortgage, amortization and balloon schedules. It is vital for us to try “wring-out” as much cash flow from our properties as possible by keeping our borrowing costs as low as the banks will allow. We do this by following the markets and recasting notes to float when rates are heading lower (right now) and by trying to get fixed rates as or before they start rising.

One source we review is Wachovia’s Economic Commentary web page to read a succinct view on what’s happening in capital markets and to see their predictions for Fed, Libor and Treasury rates in the Monthly Economic Forecast section.

Are there other websites you consult to see rate predictions? Please share with us in the comments section. -DW

Wealthy Americans see a real estate buying opportunity

This article was posted on Marketwatch.com yesterday and I though it was both insightful and similar to how we view buying opportunities within the current commercial real estate market.  -DW