ValueXpress was very active in CMBS originations in 2003; after the shock of the events of September 11, 2001 began to lift from the commercial real estate markets 2002 and 2003 began a strong period of growth in CMBS originations: $52 billion in 2002 and $78 billion in 2003. In 2003, ValueXpress originated approximately $158 million of CMBS loans in about 40 transactions.
While many of the properties securing the CMBS loans we did in 2003 were sold, paid off early, or refinanced into a different loan product, ValueXpress has been fortunate to redo a fair amount CMBS loans it closed in 2003.
“I recently received a call from a 2003 borrower who said, ‘Mike, I can’t believe it’s been 10 years!’ Sure enough, this $3-million self-storage loan in Westchester County, NY was due,” said Michael D. Sneden, Executive Vice President of ValueXpress. “What’s nice is that loan rates back then were in the mid-6s; the loan has paid down to $2.5 million, and we are replacing it with a $3.5-million loan at about 4.75%. Best of all, the borrower gets a $1-million cash out and the new payment will be lower than the old one.”
“Same story here,” noted Gary Unkel, Senior Originator at ValueXpress. “I have a client with whom I did two CMBS apartment loans 10 years ago; we just added another small apartment complex to the mix and will be providing a cash-out CMBS refinance that will not increase the loan payment much at all.”