Page 20 —
COLORADO REAL ESTATE JOURNAL
— December 17, 2014-January 6, 2015
For Company Profiles, Contact
Information & Links, Please Visit
Commercial Real Estate
Lenders
Directory
COMMERCIAL REAL ESTATE LENDERS DIRECTORY
If you would like to include your firm in this directory,
please contact Jon Stern at 303-623-1148 o
@
Academy Bank
Acre Capital LLC
Bank of Colorado
Bank of the West
Berkadia Commercial
Mortgage, LLC
Capital Source
CBRE|Capital Markets
Chase Commercial Term Lending
Colorado Business Bank
Colorado Lending Source
Commerce Bank
Commercial Federal Bank
Essex Financial Group
Fairview Commercial Lending
FirstBank Holding Company
Front Range Bank
Grandbridge Real Estate Capital LLC
Heartland Bank
JCR Capital
Johnson Capital
JVSC-CBRE Capital Markets
KeyBank N.A., Key Commercial
Mortgage Inc.
Merchants Mortgage and Trust Corp.
Montegra Capital Resources,
Private Lender
Mutual of Omaha Bank
NorthMarq Capital, Inc.
Principal Partners Lending
TCF Bank
Terrix Financial Corporation
Trans Lending Corporation
U.S. Bank – Commercial Real Estate
U.S. Bank SBA Division
Vectra Bank Colorado, N.A.
Wells Fargo SBA Lending
Wells Fargo N.A. – Commercial
Real Estate Group
West Charter Capital Corp.
Finance
A National IRC §1031 “Qualified Intermediary”
Erin Crowley
Colorado Division Manager
Denver 720.648.3512
Colorado Springs 719.481.9788
|
Call for a complimentary consultation.
Take advantage of smart 1031 exchange tax solutions from Asset Preservation
and our expertise from over 150,000 succesful exchanges in 24 years.
A
t this time last year, the
consensus was that
long-term rates would
continue their ascent and we
would see a gradual return to
a normalized interest rate envi-
ronment. The 10-year Treasury at
year-end 2013 was 3.03 percent,
an increase of approximately 140
basis points from May 1, 2013.
The expectation was that 10-year
Treasury yields would continue
their rise above 3 percent in 2014.
However, from Jan. 1 to Oct.
3, 2014, a 59 bps decrease in the
10-year Treasury was realized.
There are various factors that have
influenced the current rate envi-
ronment, including Fed policy,
bank liquidity regulations and
geopolitical tensions.
Since the beginning of 2014,
the U.S. Federal Reserve steadily
reduced its monthly purchas-
es of U.S. Treasury bonds and
mortgage-backed securities from
a peak of $85 billion to $15 bil-
lion per month, signaling a grad-
ual end to its quantitative eas-
ing program. In October, the Fed
announced the official end to QE
while committing to keeping low
interest rates for “a considerable
time.” The Fed has stated that it
will likely maintain the zero per-
cent to 0.25 percent target range
for the federal funds rate despite
the end of QE. Additionally, the
effects of QEwill persist even after
bond purchases end. The Fed cur-
rently has approximately $4.4 tril-
lion in assets and will continue
to own all of the bonds it pur-
chased during QE. Reducing the
supply of Treasury bonds in the
market resulted in higher bond
pricing and lower yields. The Fed
isn’t expected to start shrinking its
portfolio until after it starts raising
the federal funds rate.
At the same time the Fed initi-
ated a reduc-
tion in bond
pu r c h a s e s ,
U.S.
banks
were accel-
erating their
purchases of
U.S. Treasur-
ies. The U.S.
r e g u l a t o r y
implementa-
tion of Basel
III and the
Dodd-Frank
Act represents
a change in capital standards.
The new regulatory require-
ments are meant to strengthen
capital requirements by increas-
ing bank liquidity and decreas-
ing their leverage. As a result,
banks are now held to increased
liquidity ratio standards. Accord-
ingly, banks have undertaken
unprecedented purchasing of U.S.
Treasuries. U.S. banks acquired
$71.99 billion of U.S. Treasuries
in the third quarter of 2014, a
26.32 percent increase from the
previous quarter. These institu-
tions have added $185.8 billion
in U.S. Treasuries the past year, a
116.35 percent increase, and are
nowholding a total $345.49 billion
of U.S. Treasuries. To some the QE
taper was an illusion and the only
material change was the buyer of
the Treasuries.
Geopolitical tensions and weak
foreign economies have caused
a flight to safety in the capital
markets. In 2014, the world has
experienced theUkraine crisis, the
imposition of sanctions against
Russia, the military success of ISIS
in Iraq and Syria, the escalation of
the Israeli-Hamas conflict in Gaza
and the outbreak of the Ebola
epidemic. Furthermore, Euro-
pean economies such as France,
Germany and Italy have dem-
onstrated weak economic perfor-
mance. Growth for the 28-mem-
ber European Union is expected
to be only 1.3 percent in 2014,
with little improvement forecast
for 2015. The European Central
Bank, though much later to the
party than the U.S. Fed, has only
recently decided to expand its bal-
ance sheet to inject a lifeline into
the region’s economic growth.
Asia also has experienced slow-
ing growth. Persistent geopolitical
risks influence investor fear with
the resulting increase in demand
for safe investments like U.S. Trea-
suries.
It is difficult to predict where
rates will be at this time in 2015.
What we do know is that rates are
low by historical standards. The
50-year average 10-year U.S Trea-
sury is 6.48 percent, compared
with 2.35 percent at the end of
October. Lenders, including life
insurance companies, Freddie
Mac, Fannie Mae, commercial
mortgage-backed securities and
other sources, have been active in
2014 and this is expected to con-
tinue into 2015.
Interest rates for commercial
mortgages mirror the historical
low Treasury yields, and attrac-
tive long-term fixed-rate financ-
ing remains readily available.
Several life insurance companies
along with Fannie Mae offer pay-
ment terms from10 years up to 30
years fully amortizing at attractive
fixed rates. For those who want to
maintain flexibility, various float-
ing-rate options exist. To borrow
a baseball metaphor, we are not
only well into extra innings, but
are in extra innings of the sec-
ond game of a doubleheader in
this low interest rate environment.
Owners of commercial real estate
will continue to be the beneficia-
ries of this state of affairs.
s
Brock Yaffe
Associate director,
HFF, Denver
