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Commercial Mortgage Financing Advisors:

Winter & Company arranges commercial mortgages over $5 million for multifamily apartment buildings, co-op underlying mortgages, mixed-use properties, retail properties, office buildings, hotels, industrial and net-leased properties. We work with seasoned real estate investors and developers of multifamily rental buildings and condominium developments to arrange optimal financing for their projects. We arrange Acquisition Loans, Bridge Loans, Construction Loans and Permanent financing for both income-producing and owner-occupied properties nationwide. We address all components of the capital stack including Equity Participations and Joint Ventures, and we excel in providing compelling solutions for Structured Finance and other complex assignments. We are based in midtown Manhattan and most of our commercial mortgage advisors have decades of experience as well as a deep network of contacts in both the capital markets as well as with regional and local banks.



Winter and Company

March 2013

2013: Last call for the lowest interest rates in our lifetime?

Dear Friends and Colleagues:

Although there is a sense that we may have now “moved past the bottom of the bell curve” with respect to the future direction of interest rates, Winter & Company recently closed a 3.23%, $10,000,000, 10-year fixed-rate, interest-only mortgage to refinance an architecturally important, 105-unit, 30-story 1928 cooperative building in Brooklyn Heights, NY. The loan structure provides the co-op corporation with a $1,000,000 LIBOR-based, revolving line of credit to handle any unforeseen capital needs should they arise during the loan term (and, of course, experience dictates that they are more likely to arise than not, especially with a historic and landmarked building such as this). The new loan structure will provide the co-op corporation with approximately $5 million of surplus loan proceeds to pay for important repairs and capital improvements. While this borrower decided upon an interest-only structure, many cooperatives choose a 10-year loan, which will amortize on a 30-year schedule.

Last week we presented a $28 million, 3.25% offer to a 171-unit, Fort Lee, New Jersey cooperative for a 10-year, interest-only loan to refinance their existing $20 million underlying mortgage. The new loan will actually REDUCE their monthly and annual payments despite the significant increase in loan size. Surplus proceeds will pay the large ($2,200,000) pre-payment penalty on their old mortgage and also provide ~$6,000,000 for a series of major capital improvements that are planned for the 32-story co-op. At a meeting of the board and shareholders, the co-op voted to accept the offer and locked in their interest rate by signing their term sheet and providing a 1% refundable good-faith deposit. The new loan will have a simple, “friendly”, step-down prepayment penalty structured as follows: 5,5,4,4,3,3,2,2,1,1 giving the co-op a great deal of flexibility in the later years of the loan term.

Multifamily and Co-op Underlying Mortgages in 2013: the direction of interest rates -

In our opinion, the first quarter of 2013 may well be the “last call” for rates at the “bottom of the market”. Sub-3% pricing for 10-year money is already behind us, and even low-to-mid 3% pricing, while still available for lower-leverage multifamily loans in the $5 million to $40 million range is becoming increasingly scarce, so clearly, now is the time to make a move if you and your colleagues have being thinking about refinancing. Remember that forward rate locks can help to bridge the gap when an existing loan can’t be repaid immediately due to a draconian lockout or prepayment penalty.

Certainly we would suggest that every co-op board and multifamily property owner in and around New York City should review the prepayment penalty on their current underlying mortgage (or simply request that we calculate it), and then consider whether it might make sense to refinance now (or perhaps to lock in a rate now for a closing to occur up to nine months hence). Our firm is always prepared to perform a thorough analysis to help borrowers consider their options (and to calculate the pre-payment penalty on their existing mortgage) with no obligation.

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So whether it’s long-term, fixed rate financing for multifamily and mixed-use properties, or for any aspect of development or bridge financing, call or email me to discuss at your financing scenarios at
(212) 532-1122 x1 | gregg@winterandcompany.com

Very truly yours,
Signature

Gregg Winter,
President

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Whatever our client's goals, our goal is to make it happen. We are commercial mortgage experts seeking to add value to your next transaction.

If time constraints are your main concern, visit www.w-financial.com for quick-close loan situations. W Financial is a DIRECT PRIVATE LENDER appropriate for short-term bridge loan scenarios.


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149 MADISON AVENUE | NEW YORK, NY 10016 | 212-532-1122 | FAX 212-532-1222 | INFO@WINTERANDCOMPANY.COM

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