July 11, 2017
Alternative lenders have raised significant amounts of capital and are more frequently filling gaps in the CRE mortgage sector. The five largest players – Blackstone Group, Mesa West Capital, Starwood Capital Group, TPG Capital and Mack Real Estate Credit Strategies – collectively funded some $20 billion of interim loans in 2016.
Often, these loans funded larger sized mortgages with initial terms of two to three years, which allows sponsors to complete upgrades or stabilization efforts. There’s also a host of other non-bank lenders doing deals in the $10 million to $100 million range.
This “mainstreaming” trend follows new increased capital requirements for banks, banking industry consolidation or pullback by CMBS lenders. Alternative lenders held just 3.1% of the nearly $3 trillion of outstanding mortgages last year, according to the Mortgage Bankers Association.
MBA’s 2016 Top Lending sources:
- Banks 40.4%
- Freddie Mac and Fannie Mae 17.6%
- CMBS 15.5%
- Life insurance companies 14.2%
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