Refis, Retail and Resources
Chad Thomas Hagwood, senior managing director and regional manager for the Southeast at Hunt Real Estate Capital, closes loans across the nation and sees opportunities in multiple sectors in 2019. While multifamily is still a standout, his scope extends beyond the industry buzzwords common today.
Do you think refinancing activity will be as robust as it’s been in the recent past?
Hagwood: There is no doubt refinancing will remain very active in 2019. Treasury yields have subsided from north of 3 percent and spreads are still extremely attractive. Many owners intend to hold their properties as opposed to selling. They realize they will have to pay top dollar to find a replacement property, or shell out a portion of their gains to Uncle Sam. It makes a great deal of sense to refinance and cash out versus sell, in many circumstances.
What has been Hunt’s most popular loan product as of late?
Hagwood: Both the 10- and 12-year fixed-rate conventional products with maximum IO [interest only] have been extremely popular with Hunt’s customers. In my opinion, the level of fixed-rate conventional business will continue to grow well into 2019 and beyond here at Hunt. The fixed-rate offering — compared with adjustable and floating rate loans — gives borrowers a sense of security as rates have been extremely volatile in recent months. Although the first quarter of 2019 has been positive economically, I still foresee the 10- and 12-year fixed-rate product to be our most popular program this year.
Outside of multifamily, what product type do you believe will be the most attractive to finance in 2019?
Hagwood: Outside of multifamily, we do quite a bit of manufactured home communities across the country. The manufactured home community is a very attractive product for financing. For the past two decades, I’ve been actively involved in financing this asset class and have developed a specialized understanding of the product and the properties’ nuances.
Hunt finds this segment very appealing and will continue to grow our presence and products for this asset class. By nature of the product itself, Western states and Florida are the more active regions for financing, but in recent years there has been increasing activity in middle-market areas.
How has the changing nature of retail and its reliance on industrial impacted financing for these two product types?
Hagwood: There is always going to be a need for retail and industrial. All the news and talk of “the death of retail” has been overstated in the overall scheme of things. While it’s very true the golden days of the enclosed shopping mall may be behind us, you still can’t get your nails done or your hair cut on Amazon. I see unanchored retail as overlooked, and I think there are some investment and financing opportunities there.
Can you tell us about your new Broker Hub and any goals you have for this platform?
Hagwood: Hunt launched our Broker Hub at the end of 2018 to provide a resource for brokers to obtain the current information they need. This allows them to quickly deliver the best available financing options to their clients. When a broker submits a request for a quote or term sheet, they receive an email with links to all of Hunt’s pertinent loan programs. When they request a formal quote, we have developed an efficient process to ensure someone local from our origination team responds within 48 hours. We hope that having this repository of information about our programs, and a direct line of communication, will help brokers easily connect with us while streamlining the quoting process.