Take advantage of capital availability now.

The relationship that exists between the real estate and finance markets is one of co-dependence. The health of the real estate market is directly effected by the strength of the finance market and vice-versa. If credit is cut-off, it can immobilize the market and conversely, a boost of capital into the market for lending can inflate the market.

Currently, there seems to be a never ending supply of capital chasing real estate deals for acquisition, as well as refinancing. The continued strengthening of the real estate market will be the direct result.

Further contributing to the growth of the real estate market is the emergence of untraditional lending sources, which have opened up new avenues of finance. These new players are providing financing for deals deemed untouchable just a few years ago. Capital is now available from both Wall Street and the private sector - loosening the constraints on underwriting criteria and providing financing for about any type of project out there. While the rules have not changed for traditional lenders like banks and insurance companies, the competition has intensified.

With all these new players in the game, what separates one source from the next is based on three factors: pricing, loan-to-value and debt service coverage requirement as compared to your competitor and how flexible you are in your underwriting criteria. Banks, insurance companies and conduits, traditionally more rigid in their underwriting criteria, still remain so.

Although slower to close, these conventional lenders will remain active players for the foreseeable future. Wall Street/REITs, while faster than traditional sources in closing and more aggressive in their loan-to-value, still have their constraints. Higher pricing, sluggish closing time-frames, and guidelines that can be restrictive have encouraged many investors to turn to the third tier of financiers.

This third tier of financiers - companies like Mercury Capital Corporation - are known for their ability to close a deal quickly and set underwriting criteria which is generally more flexible, because deals are analyzed independently. Consequently, pricing can be higher than second tier financiers.

With so much capital available, opportunities for investors are endless. While each property type provides its own window of opportunity, our focus is on a broad range of property types which includes retail, multi-family, office and industrial properties.

The rental housing market is receiving the majority of attention in today's real estate market. The conversion of rental housing to co-op and condominium use throughout the 80's dramatically reduced the supply of rental housing throughout NYC, the outer boroughs and the suburbs. With virtually no supply added to the market over the last several years, this demand has intensified and consequently, so has opportunity for investors.

The office market offers opportunity in two different segments. The Manhattan office market has heated up - rents are rising and corporations are expanding. As long as construction remains limited, the NYC office market will provide substantial returns. The suburban markets are a different story. High vacancy rates and corporate relocations have resulted in long-term, not short-term, opportunities. The greatest opportunity for the suburban markets will come from the tightening and consequently, rising rents in NYC, as the trend of "flight to quality" ensues.

The Tri-State industrial market is improving beautifully and should be carefully watched. Vacancy rates continue to decline, prices have stabilized and buildings are finally filling up. While the time may not be right for new development, investors should look to acquire new properties or hold onto existing portfolios as the industrial market's time nears.

Over the next five years, capital will become increasingly less accessible than it is today. The key is to buy right and finance properly now, to insure your investments for the long-term. Now is the time to bet on the future.