Key Takeaways from the Atlantic Real Estate Forum
Property owners and developers throughout Atlantic Canada gathered in Halifax on June 12, 2019 for the Atlantic Real Estate Forum Conference. During the panel discussion "A Deep Dive Into Credit and Debt Markets," First National's Jody Comeau, Assistant Vice President, Commercial Financing, made the following key observations.
First National is committed to Atlantic Canada.
Approximately 10% of all First National commercial mortgage originations in Canada occurred in the Maritimes last year and we are determined to continue growing locally through term-loan business – conventional and CMHC-insured – including construction loans.
Halifax is a favoured market at First National.
Due to the city's size and the volume of lending opportunities, Halifax is a key market for us, and the home to our regional headquarters, but we lend across Atlantic Canada.
First National's primary consideration when financing a project is the character of the borrower not the property's location.
Unlike other lenders, we don't start our due diligence by looking at the location of a project; we first consider the experience and quality of the borrower and whether we can develop a trusting partnership.
First National is known for multi-unit residential lending but our lending appetite is broader.
We have expertise across a number of asset classes in Atlantic Canada as befitting our status as the country's largest commercial mortgage lender with a book of approximately $30 billion.
It's a 'borrower's market' in Atlantic Canada today.
Because there is more capital available than there are commercial properties and development projects in which to invest, borrowers – not lenders – are in the driver's seat in Atlantic Canada.
Now is a great time to take advantage of historically low interest rates.
Interest rates have declined significantly since peaking last fall, making this the ideal time to consider financing a commercial property development or purchase.
First National has the ability to lock in interest rates for clients who are concerned about the future direction of debt markets.
When rates peaked last fall, many borrowers began to seriously consider "forward-fix" strategies with First National's help and even though rates have since declined, there is still interest in the merits of these strategies.
Borrowers continue to consider shorter- and longer-term duration commercial mortgages.
Because one size does not fit all, First National provides various mortgage durations to address the needs of borrowers who want security and/or flexibility.
Despite the availability of "cheap money" from conventional sources, it still pays to consider CMHC financing.
As both a conventional and CMHC-approved lender, First National believes borrowers should look at both options and not buy into the perception that CMHC insured loans are too restrictive or too difficult to secure.