• Real Estate Finance

    CIT Real Estate Finance originates and underwrites senior secured commercial real estate transactions. Transactions are focused on experienced and well-capitalized sponsorship that require moderate leverage, a visible repayment strategy, and market competitive terms and pricing. We provide financing for single properties, property portfolios and loan portfolios.

    Products & Services

    • Cash flow investment loans, which often have a value-add component
    • Construction loans to highly experienced and well capitalized developers
    • Cash management
    • Revolving lines of credit
    • Loan on loan financing
    • Loans $15 million plus

    Key Areas of Focus

    • Office
    • Retail
    • Industrial
    • Multi-family rental
    • Select for sale condominium
    • Select hospitality
  • Related Content

    The sharing economy is changing office space as we know it. [Article]
    Commercial real estate executives predict higher than average deal volumes. [Outlook, Video, Infographic]

    A period with ample sources of capital, very low cap rates and high valuations has set the stage for commercial real estate in 2016, but the impact of coming regulations is yet to be factored in. Nonetheless, as long as there are only gradual increases in interest rates and continued modest increases in employment, the commercial real estate market should operate smoothly. 

    Collateralized Mortgage Backed Securities - one major source of capital - are now bracing for two new regulations that take effect in the fourth quarter. The market is struggling to interpret the specifics of these regulations. Alternatively, on a positive note, employment growth has been smooth and steady, which is a great thing for real estate.

    Some of the other commercial real estate trends we're seeing include:

    Market Prepares for New Regulations:  Collateralized Mortgage Backed Securities (CMBS) face two new regulations in Q4. One is called Risk Retention, where underwriters are required to retain part of the risk as they sell CMBS bonds into the secondary market. The second new regulation requires senior individuals to sign off on the quality of the CMBS loan product.

    Uncertainty Could Impact Liquidity:  As a result of a largely unknowable fourth quarter, many CMBS originators are clearing inventory in order to help divert any potential risk they may be exposed to by these new regulations. That could siphon off liquidity needed to refinance loans.

    Opportunities in Secondary and Tertiary Markets:  There have been differences in yields across major cities, such as New York and Los Angeles, versus smaller urban areas. Once interest rates begin to climb, the return of a deal will take a notable dip. With real estate opportunities found in a secondary or tertiary market, often the asset can be acquired at more favorable terms, mitigating interest rate risk. The right assets in secondary markets can be a very attractive place to invest. In any event, these deals and the banks involved need a liquid CMBS market to be repaid.

    U.S. Real Estate Especially Attractive for International Investors: Even amid uncertainty, the U.S. real estate market remains one of the most attractive sectors for many internationally sourced funds. The tone of the market is shifting, but opportunities remain.

    Overall, the outlook for the commercial real estate market remains stable as regulatory changes approach.

    To learn more, watch the video, "Regulatory Uncertainty Impacts Commercial Real Estate," on the Knowledge Center on CIT.com.

    Matt Galligan is President of CIT Real Estate Finance. His group provides stabilized, value-add and construction loans between $20 million and $50 million to highly experienced and well-capitalized developers in the office, retail, industrial and multi family rental sectors. 

    As found by the "2016 Commercial Real Estate Outlook," released by CIT, many commercial real estate executives see solid prospects for their sector, with 52% indicating that they believe that their segment of the market is either strong or very strong, and 71% say adequate capital is available for investment. 

    The study found that commercial real estate executives appear relatively optimistic about the general state of the market in 2016, with many predicting higher than average deal volumes for their firms. Further, when considering the adoption of new technology, most believe that the influx of commercial real estate tech companies is revolutionizing the industry.

    CRE Carousel thumbnail Other key findings from the study include:

    Recovery Seen While Challenges Remain: Although commercial real estate executives have a mostly positive view of the market, they recognize that, while the U.S. commercial real estate market is recovering (47% agreeing), there are still certain segments that are poised for significant decline (44% agreeing).

    Mixed Market Conditions Lead to Opportunistic Posture: Just over 60% of executives surveyed characterize their current market posture as opportunistic, describing today's market conditions as a mixed bag offering both challenges and opportunities. When reflecting on the economy, they see interest rates, consumer confidence, U.S. tax rates, unemployment and the global economy, respectively, as the top five factors driving commercial real estate investment.

    Rise of CRE Technology Seen as Having Impact: The benefits of commercial real estate technology are clear, with most executives agreeing that these advancements are revolutionizing the industry (55% agreeing). Despite this, many are slow to adoption, with only 11% of respondents rating themselves as "leading edge" when it comes to implementation.

    Liquidity Available for Solid Opportunities: The majority of companies, 71%, say adequate capital is available for investment. One in four, 24%, say capital is available for "the right" deals only. When asked about financing, slightly over half of respondents say that they are lengthening the duration of their financing in an effort to lock in today's relatively low rates over a longer period of time.

    Local and State Incentives Have Influence: Incentives continue to be offered by state and local governments in the form of tax credits, cash grants and related business incentives. Thirty-four percent of surveyed executives agree that green tax credits and cash grants are having a significant influence over their design/renovation and related commercial real estate investment choices.

    Demographic Shifts Drive Market Changes: Executives are split on the commercial real estate impact of baby boomers downsizing their lives, citing both the positive (33% emphasizing) and negative (26% emphasizing) effects on their investments. The emergence of rules mandating that low-income housing be integrated with affluent housing also delivers mixed results. Overall, those who see changing demographics as a top five driver tend to target properties with relevance to middle-income consumers.

    In sum, commercial real estate executives have solid outlooks for their market segments and see technology and demographics, among other factors, as key drivers of change in the sector.

    Complimentary copies of the CIT Commercial Real Estate Outlook can be downloaded at cit.com/realestateoutlook.

    CIT commissioned Forbes Insights to conduct online research between February 12 and March 14. Forbes Insights surveyed 201 senior executives from commercial real estate management companies, brokers, investors, financing executives and attorneys.

    Matt Galligan is President of CIT Real Estate Finance. His group provides stabilized, value-add and construction loans between $20 million and $50 million to highly experienced and well-capitalized developers in the office, retail, industrial and multi family rental sectors.  

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