Commercial property lending in the United States continued upward momentum in 2014 and is expected to stay strong in the year ahead. This quick guide helps you jump start your commercial real estate strategies for retail lending for 2015. Learn more: http://www.us.jll.com/united-states/en-us/services/investors/capital-markets/debt-and-equity-finance

1. Top 5 things to know: Retail lending
The guide to financing in commercial real estate
Spring 2015

2. Commercial property lending in the United States continued its upward momentum in 2014 and is expected to stay strong
in the year ahead. Liquidity in the debt markets is pushing core pricing, and strong activity coupled with aggressive lending
and competitive structures on the debt side is supporting price strength further out the risk curve into value-add and
opportunistic plays mainly seen in the rising secondary markets. Demand on the equity side from institutional, private funds
and foreign investors is also expected to remain strong in 2015. The next three years will bring an unusually high wave of
loan maturities, a majority of which can be recapitalized without additional equity, further driving lending volumes. Banks, life
insurance companies and CMBS lenders will all become increasingly competitive, driving growth across more markets and
a greater number of geographies.
Thomas O. Fish
Executive Managing Director / Co-Head
Capital Markets
+1 713 888 4047
Tom.Fish@am.jll.com
Mike Melody
Executive Managing Director / Co-Head
Capital Markets
+1 713 888 4089
Mike.Melody@am.jll.com
Tom Melody
Executive Managing Director / Co-Head
Capital Markets
+1 713 888 4053
Tom.Melody@am.jll.com
An introduction

3. 1
Due to the liquidity of the debt capital markets
and the pursuit of higher yields, all lender groups
including life companies, CMBS, banks, pension
funds and debt funds are placing capital on retail
product on a national basis at loan-to-value ratios
of 65-85 percent. Grocery-anchored assets in
primary markets continue to attract the most
aggressive capital, however the availability of
capital for all product types and locations still
remain aggressive.
Retail lending: Uptick
in competition

4. Retail lending: Loans
and leasing2
Non-recourse construction loans are available
for significantly pre-leased retail developments
(1.0x coverage or better). In addition,there is a
significant amount of liquidity for redevelopment
opportunities on well-located existing assets
that have been mismanaged or need capital
upgrades to attract national tenants.

5. Retail lending:
Institutional activity
increase3
Institutional investors are still under-weighted
in retail and are most actively pursuing trophy
assets in major markets and grocery-anchored
strip centers. Expect an increase in acquisition
financing, primarily funded by life companies
and CMBS as they will continue to have a heavy
appetite to help balance out their allocations.

6. Retail lending:
The oil price effect4
While the economy seems to be in shock about
the rapid decline in oil prices, until there is a
noticeable decline in jobs, lower oil prices are
viewed as positive for the retail sector. The money
saved at the pump is additional discretionary
income people are spending on retail goods.
Increased retail activity from consumers builds
investor and lender confidence in the sector.

7. Retail lending: Social
media and sales5
Two key factors play a significant role in driving
consumers to brick and mortar locations: highly-
differentiated products and social media. While there
is plenty of competition for value-priced products,
consumers are willing to pay a premium for unique
products that are typically not available online, while
social media provides retailers and retail owners with
additional touch points to the consumer. For example,
retailers tweet out coupons for consumers to download
on their phone to bring into a store and retailer owners
use social media to drive awareness and promote
sales and their respective locations. The more often
consumers visit retail locations, the greater need there
is for debt to maintain physical assets.

8. Jimmy Board
Executive Vice President
Capital Markets
+1 713 888 4029
Jimmy.Board@am.jll.com
Thank you
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