Creative financing helped fuel commercial real estate boom
The dominant story in real estate the last two years has been cash — fabulous amounts of cash in furious pursuit of real estate.
One chapter that emerged from that story was the evolution in the way lenders financed those deals, including their willingness to provide higher leverage and more comprehensive structures to bring those deals to closing.
In some of the nation’s hottest markets, those structures have incorporated some eye-popping leverage on transactions, with loan-to-value ratios climbing well above 95 percent for senior and mezzanine debt, and straight equity almost disappearing from the package.