Friday, April 8, 2011

Construction Lending Going Back To Fundamentals

Monday, March 28th, 2011

David Guerra
Bankers have little appetite for speculation
By R. David Guerra
President & CEO IBC Bank-McAllen

Since joining IBC Bank in 1981, and even before that in my role as a national bank examiner for the U.S. Treasury, I’ve seen a lot of market cycles.  Trends come and go, financial services become fashionable and then fall away, financing is readily available and then the market tightens.

That’s the direction the marketplace is moving now.  The pendulum in construction and development lending is swinging back toward traditional underwriting. Commercial and land development is now trending away from the local, thinly capitalized developers in favor of the larger, institutional developers with solid track records. The same trend is happening with homebuilders. In other words, credit in 2011 will be available only to the credit worthy.

Before the recession, many lenders provided credit based upon historically high loan-to-value ratios that made them more like equity partners than lenders. That has fundamentally changed. Be it commercial or residential construction, traditional upfront cash equity injections by the borrower are now the norm with any commercial loan facility.

In today’s world, real estate investors can no longer be optionees, they have to actually own the property. That’s causing a shift in the marketplace, both commercial and residential, toward large, institutional players who have the capital to meet those requirements.

Lender’s have little appetite for speculation; speculative construction, speculative investing. I don’t see that changing anytime soon.

Personal guarantees of debt are again the norm. It’s not the old, “I’ll put up the equity but I’m not going to guarantee the loan. If it doesn’t work, the lender just takes back the property.”

Today, personal guarantees are required. In the past many lenders allowed ...

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Five Guys burgers and fries soon to open in McAllen

TAMPA, FL. –March, 2011– Five Guys Burgers and Fries will be opening at 3701 West Expressway 83 in McAllen in June of 2011.  This will be TCH Restaurant Group’s 14th Five Guys to open in the Texas market during the last two years.

The menu at Five Guys is simple: burgers, hotdogs, fries, fresh veggie sandwiches and grilled cheese sandwiches. The décor is purposely simple so that it does not take away from the most important part of this restaurant, the food. 

The burgers are hand pattied daily and made to order with 100% American Beef that is preservative free and never frozen.  The fries are whole potatoes, cut daily, soaked in water and then cooked to order in, no trans fat, peanut oil and may be ordered with Cajun seasoning. 

The buns are shipped in from the Five Guys bakery and do not contain any fillers or artificial preservatives. All toppings are free and include crisp lettuce, ripe tomatoes, juicy pickles, sautéed portabella mushrooms, green peppers, grilled onions, A1 sauce, jalapeno peppers, hot sauce, mayo, relish, and barbecue sauce. Kosher hot dogs are served split and grilled plain, or topped with cheese and bacon. 

This location, as well as the thirteen other Texas locations are owned and operated by TCH Restaurant Group which is lead by Bob Dorfman. TCH Restaurant Group has Five Guys locations in Tampa, Florida, Corpus Christi, Houston and Columbus, Ohio.

The family owned Five Guys restaurant group has provided award winning burgers and fries to the Northern Virginia area for over ...

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