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April 5-18, 2017 - Page 33 COLORADO R EAL ESTATE JOURNAL
ness as ERA Fleisher from offices
located in Glenwood Springs,
Basalt and Rifle.
Daren Roberts, president, will
lead the company and expand
its residential and commercial
real estate sales focus as well as
increase its presence in commer-
cial and residential leasing and
property management. Earlier
this year, Roberts acquired Fleish-
er Real Estate and Property Man-
agement, established in 1975 in
Aspen. Roberts also operates ERA
New Age, a real estate and prop-
ertymanagement company based
in Centennial.
“The addition of ERA Fleish-
er strengthens the brand’s pres-
ence in the mountain region
and Western Slope of Colo-
rado, supporting both regional
and national referrals,” said
Sue Yannaccone, president
and CEO of ERA Real Estate.
■ It’s a new name for the Vail
Cascade Condominiums.
Laurus Corp., a private real
estate investment and devel-
opment firm, announced the
Vail Cascade Condominiums
have been renamed the Vail
Residences at Hotel Talisa. The
announcement comes after the
firm’s renaming late last year’s
of the 285-room Vail Cascade
Resort and Spa as Hotel Talisa,
Vail.
Hotel Talisa, Vail currently is
undergoing an expansive renova-
tion and rebrand, including its
285 guest rooms, public spaces,
restaurant and new full-service
spa. The resort, including the new
hotel and Vail Residences at Hotel
Talisa, which include Cascades
on Gore Creek, Coldstream,
Liftside, Millrace, Penthouses
and Westhaven complexes
along with private homes, will
remain under the management
of Two Roads Hospitality ,
with the residences remaining
under the Destination Hotels
brand.
The residences are set at the
base of Vail Mountain. ▲
Snowmass
continue to offer nonstandard
products, including lease-up,
moderate rehab and value-add
loans. Additionally, Freddie Mac
is exploring a construction loan
product for market rate proper-
ties that maintain affordable rents
during the life of the loan.
■ CMBS. The CMBS market
experienced declining volume
in 2016 due to tightening under-
writing standards and wider loan
spreads. The number of CMBS
lenders has declined from an esti-
mated 40 at the outset of 2016
to approximately 10 to 15 going
into 2017. The majority of the
remaining originators are large
institutions. Another factor affect-
ing the CMBS market in 2016
was the impending “risk reten-
tion” requirement. Commencing
in December 2016, risk retention
requires the sponsor of a secu-
ritization to retain 5 percent of
a CMBS issuance on their bal-
ance sheet, or in the alternative
the buyer of the noninvestment
grade “B-Piece” must hold the
security for at least five years.
CMBS issuance in 2017 and
beyond has many uncertainties
attached to it. While the expecta-
tion is that CMBS spreads, and
conversely interest rates, will
widen as a result of risk reten-
tion, the opposite has occurred
thus far in 2017. The remaining
issuers in the market are com-
peting aggressively for the best
of the best properties, and in
some cases, spreads and inter-
est rates are below those of life
insurance companies, espe-
cially for low-leverage loans.
The CMBS market has become
more conservative. Maximum
leverage and interest-only peri-
ods are down from previous
years, while at the same time,
the emphasis on asset quality
and location has increased. In
the short term, the lack of new
CMBS issuance has resulted in a
supply and demand imbalance
that has resulted in improved
pricing for CMBS loans. How-
ever, it is expected that CMBS
pricing will increase as the mar-
ket normalizes throughout 2017.
■ Commercial banks. Com-
mercial banks are expected to
continue to feel the effects of regu-
lations that were implemented in
2015, which will constrain their
lending in 2017. These new stan-
dards were instituted primarily
as a result of the economic down-
turn, and require an increase the
amount of capital banks must
hold against commercial real
estate loans, especially construc-
tion loans. As a result, along with
concerns about supply and con-
centration risk in certain markets,
construction loans have become
less desirable. Banks will contin-
ue to be selective for new con-
struction loan opportunities, and
new loans will be more conser-
vative than in past years, which
translates into increased pricing.
Commercial banks still have very
active lending programs for stabi-
lizedproduct both on a short-term
and long-term basis. Selective
banks can now offer competitive
loan terms exceeding seven years
or longer. Traditionally, banks
have only offered loan terms of
up to three to five years. Pricing
for term loans continues to be
competitive, with floating rates
typically in the range of 225 to 275
basis points over 30 day Libor.
Many banks can now offer com-
petitive fixed rates for term loans,
or swap to fixed rates.
■ Debt funds. Debt funds have
increased their role in the com-
mercial real estate lendingmarket,
particularly in providing nonre-
course loans on value-addproper-
ties with riskier profiles and filling
the void for construction loans as
a result of tightening bank con-
struction lending. These entities
are unregulated, and are exempt
from same rules as banks. Debt
funds will lend a higher level of
proceeds on a nonrecourse basis,
albeit at higher interest rates.
They will typically lend up to 85
percent of cost, with the ability
to advance proceeds for future
expenditures, with a term of three
years at floating rates typically
in the range of 350 to 600 over
30 day Libor. The availability of
loans from debt funds is expected
to expand in 2017. There are more
debt funds than ever, and new
funds are expected to senter the
market in 2017. Pricing for loans
is expected to tighten given the
availability of capital in the space.
Debt, and sources of debt,
remains plentiful and readily
available in 2017 with a variety of
choices and loan structures, which
makes for a competitive lending
environment for prospective bor-
rowers. ▲
MBA