Remington Capital – Brad Sweet

This week I was reading in MBA Newslink about the upswing in hotel deals. The good news is that it can’t get worse!

At Remington we have continued the transaction flow in the hotel segment, and we look forward to working with brokers to continue funding viable hotel investment opportunities.

Hotel deals reached their lowest point in 2009, and now experts forecast an increase of $3.5 billion in 2010 as owners are being forced to recapitalize assets and significant equity is entering the market. Seller financing and private money will hold the stage in 2010. Read more here.  http://www.mortgagebankers.org/tools/FullStory.aspx?ArticleId=10503

At Remington www.remingtonfg.com we are focused on financing hospitality and other commercial real estate transactions, and we forecast a continued improvement in our ability to support brokers with hotel owners – both distressed and new.  Let’s talk about new opportunities built off financing funds that we need to deploy this quarter.

Thank you!  Brad Sweet – Remington

As a broker you’re not in this to work for free. This is not a charity operation that you’re running – it’s about getting paid for your good work. The worst thing that can ever happen to a mortgage broker is that you get to the finish line, the loan closes and you don’t get paid. That is why it’s important to get a good fee agreement in place with the borrower. Whether you have one drafted up by an attorney or it is a verbal agreement, some borrowers just have bad intentions.  

Because of this, Remington can guarantee you a percentage of our origination fee so you don’t have to deal with the hassle of invoicing a client or harassing a lender. We have all the contracts in place with our investors to make sure we get paid at closing.  And by having a fee-agreement drafted up with us, you can too. This way, when your deal closes you can expect a check or wire transfer from Remington within 5 business days of closing.

The percentage is subject to increase as the deal-flow increases as well. Traditional brokers like to arrange a fee agreement with their clients and we stand behind those agreements and will work to protect you in every scenario. We’re here to help close more financing transactions and get you the broker paid for your work.  Our access to capital and other services help you get there.  Thank you!  Brad Sweet

Like other account executives at Remington, I’ve been spending more time with brokers who are assisting owners of hospitality properties. Those owners are looking for relief from lower revenue and falling property values. Brokers are seeking fresh access to active capital sources – which we can provide.

It’s estimated that $3.5 billion in hospitality loans are currently delinquent (60 days late).  Just one month ago the value was $3 billion, an increase of $500 million in just 30 days.

This shows that the hospitality sector is steadily taking a turn for the worse. The total number of delinquent commercial loans is at $17.8 billion across all industries and rising steadily.  Either the banks will have to extend these notes, take a lower pay-off or foreclose.  Either way, the outlook is not good for them or the owners.

At Remington we’re finding traction with the Distressed Owner Recapitalization (DOR) Program with brokers who are seeking to support hospitality sector owners.  Our Chairman Andy Bogdanoff recently spoke to a national group of commercial real estate experts and had these comments about the overall problem:  

“With U.S. banks in a deep and continuing liquidity crisis and with $1.2 trillion in commercial debt due to mature by 2013, thousands of real estate owners and developers across the country will soon find themselves between a rock and a hard place when their loans mature,” Andy Bogdanoff of Remington told a meeting of industry representatives.

Bogdanoff, who has been in the financial services industry for 35 years, founded Remington in 1993.  “Even if bank liquidity weren’t an issue, estimates are that two-thirds of the securitized loans and half of the whole loans due to mature between 2010 and 2013 would not qualify for refinancing due to today’s more stringent banking standards,” Bogdanoff said.

Bogdanoff added that the unprecedented high cost of funds, coupled with a 40% decline in real estate values since 2007, further compounds the problem. “With property values less than the original debt, thousands of owners and developers may have no choice but to sell their properties or face bankruptcy when their loans mature. If the problem isn’t solved soon, the result could be a disaster for the commercial real estate industry and the U.S. economy as a whole.”

Reach out to my team and let’s find a financing solution right for you and your client(s).  Thank you.

Brad Sweet – Remington