Question to all the monkeys who work in MF out there: Have you recently seen a dramatic change in DD terms whether it's deposit amounts (hard money up front or just stupid $), DD periods of 10 days or less, contingency periods of 10 days or less, or just other super aggressive/whacky closing terms on larger, institutional deals?
Lately it feels like the typical 30 & 30 has become a thing of the past. My other question to anyone on the principal side is how have you relayed this to your partners and what's been their feedback/ways around on getting more aggressive? I ask because lately I've seen a handful of $100M+ large value-add deals go under contract with 10 day DD's and in some cases hard money day 1. Not sure if this is the new normal or outliers but I can't get my head around some of the things I'm seeing.
I completely get HNW family shops or anyone with discretionary money taking this approach but knowing the capital partners of some groups that are doing this I'm a little shocked...what is everyone seeing?
We've definitely been doing compressed time frames, not offering hard money but getting it on some deals we're selling (sometimes the hard money piece can be disguised and isn't really "hard" due to some contingencies). We don't make offers with hard money and don't really see it from institutional type folks; I see it as way for a syndicator or someone to win a deal but that's a lot of risk.
30/30 is not market right now on larger/more institutional deals. 45 days start to finish is about as quick as we can move generally and still have a loan in place at closing... could probably stretch to 40 but my ops folks would fucking murder me. Theoretically, we could do 20 day DD and close at the end of DD on our line of credit, but we'd still want to lock our interest rate before going at risk.