Grady Seldin of PSRS recently spoke with Austin Ward, Commercial Mortgage Asset Manager at Ameritas, asking him a series of questions related to their current program, where they’re winning deals and his thoughts on the current market and rates. The following is a Q&A of the interview:
Where is Ameritas currently winning deals?
As of recently, we’ve been winning deals with long-term fixed-rate mortgages. The last few deals we’ve signed up have been a mix of 15-year terms, a couple 20/20’s, and some 10/30’s on apartment deals. Our multifamily activity has increased drastically once we rolled out our 30yr AM program for stable, moderately levered deals. Currently, our average deal size is $4.3M, which is where we see our sweet spot as a small balance nonrecourse lender. Except for owner-user deals, we are quoting nonrecourse across the board which was a regime change in the past 12-18 months. There are only a handful of non-recourse lenders on smaller deals with our attractive, middle-of-the-road pricing.
Cost control on smaller deals as we have inhouse legal, require a zoning letter versus zoning report, and survey endorsement, limiting the need for a survey on most deals.
Office: Tough unless we are a lower levered (55% or less) and in quality locations with strong demographics. We are primarily sticking to major markets but will do secondary market office with a good story and possibly a credit enhancement.
Retail: I have had more success with retail on neighborhood centers and strip centers as there is aggressive competition for grocery-anchored centers. The strip centers we are quoting are in great locations with strong demographics where the 1-,3- and 5-mile average household incomes of close to 100k or more.
We are unique as we have a small balance program that can quote non-recourse on most deals. We also have a bridge program, construction to perm program, and an equity team along with our commercial mortgage group. This provides the ability to tackle most borrower’s needs.
Have your spreads been steady, or have you had to drop down to win more deals?
We were trying to hold our spreads to 200bps in the last 3-4 weeks as our pipeline has been and still is packed. During that 3–4-week period we didn’t sign up much business, so we have dropped our spreads to an average closer to 185-190 depending on...
