EXPERIENCE BECOMES MORE CRITICAL AS CREDIT WOES SPREAD TO COMMERCIAL REAL ESTATE, EXPERT SAYS

Among commercial lenders, experience has rarely counted for more than it does today as the current credit squeeze has moved from the subprime to the ridiculous in leap-frog fashion, funding expert Jeffrey A. Davis believes.

The conversation has definitely shifted to the dilemma facing borrowers seeking capital for commercial real estate projects. To a lesser extent, senior housing/healthcare borrowers are in a similar bind, he observes.

Davis is Chairman of Cambridge Realty Capital Companies, one of the nations leading senior housing/healthcare lenders with more than $2.75 billion in 300 closed transactions since the mid-1990s. The firm consistently ranks among the leading FHA/MAP-approved HUD lenders in the country and optionally offers conventional funding programs as well.

Borrowers appreciate the fact that liquidity for the attractive HUD Section 232 funding program doesn't evaporate when the economy weakens and credit markets contract. These loans are an especially attractive bargain today as the Fed continues to lower short-term interest rates, he said.

Davis points out that HUD Section 232 loans most typically follow a trajectory that parallels rate trends for 10-year Treasury notes. In March, interest rates on 10-Year Treasuries dropped to 3.50 percent from 3.67 percent in February.

Conventional loans are impacted by both the Prime and the three-month LIBOR Index rates. The Prime rate remained unchanged in March at 6 percent, but the LIBOR Index rate continued to drift lower, from 3.22 percent in February to 3.08 percent a month later. Two years ago this index was at 5.32 percent, he noted.

Davis says capital market experts have begun to compare todays liquidity crisis with earlier periods when the credit well ran dry. Some are comparing the current situation with events in the late 1980s and early 1990s, which were extremely difficult years for commercial borrowers.

As was the case in the earlier period, borrowers today are learning the value of working with an experienced lender to get the best advice and obtain the best financing available, he said.

Privately owned since its founding in 1983 as a real estate investment banker specializing in commercial real estate properties, Cambridge emerged in the 1990s as one of the nations leading senior housing and healthcare debt and equity capital providers, closing more than 300 such transactions totaling more than $2.75 billion since then.

The company is one of the nation's leading HUD 232 FHA / MAP-approved lenders and also has an integrated debt / equity financing strategy that includes direct property acquisitions and joint ventures; sale / leasebacks for clients; conventional and mezzanine debt financing; and acquisition of distressed debt. Additionally, Cambridge offers a wide array of conventional lending options for senior housing / healthcare owners, including permanent construction and interim loans on either a floating or variable rate basis.

Cambridge is the creator of The Signature Experience, a four-step process designed to transform the traditional lender / borrower relationship and identify ideal capital solutions for worthy projects. The company has created four separate processes for customer groups that are designed to build and enhance long-term relationship potential and speed the way loans are processed and closed. Programs include The Key To Capital for senior housing owners, The Navigator Experience for senior housing brokers and mortgage bankers, The Principal Lender Network for lenders who refer loans to Cambridge, and The Relationship Building Experience for various industry-related consultants, including lawyers and accountants.

The company has a regional office in New York, affiliate office in Los Angeles, and correspondent relationships nationwide. The firm also has established key origination relationships and a dozen or more Internet-based strategies.

Cambridges award-winning Web site, www.cambridgecap.com, provides monthly rate updates for its debt and equity capital programs. The company also publishes the bi-monthly e-PULSE electronic newsletter, which delivers company news and feature stories via e-mail to corporate friends and clients. For additional information, contact Cambridge at (312) 357-1601 or via e-mail at info@cambridgecap.com.