Commercial Real Estate Loans under $4 Million

The continued challenges facing the commercial real estate lending markets and the significant reductions in SBA 504 real estate loans have left many commercial real estate borrowers with fewer funding solutions.

I have reached an agreement with one commercial bank to help fill some of that void for commercial real estate loans between $1 million and $4 million.
While the underwriting guidelines are tight, they reflect the current market for credit conditions.

This nationwide lender will consider a wide variety of multi-purpose commercial real estate property types - industrial, warehouse, office (including medical office) and manufacturing - for both owner occupied and investor owned properties. Sorry, no gas stations, car washes or convenience stores.

In general, expect advance rates up to a maximum of 65% loan to value, fixed rate terms up to ten years and amortizations as high as 25 years. Debt service coverage ratios start at 1.20 times for owner occupied and 1.40 times for investor owned property.

All loans are full recourse to the borrowers. The interest rates are very competitive with commercial real estate loans offered by other banks.

These loans can be use for both commercial real estate acquisition and re-finance opportunities. Even "cash out" is permitted if certain criterion are met.

Need help finding the right commercial real estate lender or telling your story the right way for your California business? Read "Matchmaking for Business Loans" and give me a call!

Tags : commercial real estate loans , commercial real estate , real estate bridge loans , private money loans

Rocky Road for Commercial Real Estate Loans

The Federal Reserve's most recent "beige book" survey released last week found that commercial real estate conditions continue to deteriorate over the last six weeks per The Wall Street Journal (subscription required).

Citing a glut in new development in the Atlanta suburb of Buckhead, developer Tom Bell claims "it's going to be a rocky road for a while".

I'm pretty sure he's not talking about his preference for the ice cream flavor.

Why am I sure?

Commercial real estate loan defaults are approaching $700 billion and another $248 billion of commercial real estate loans come due in 2009. It's going to be real interesting to see how the commercial real estate loan market will deal with these challenges.

Today, I received a list of troubled commercial real estate loans from a commercial bank. I have approached a couple of distressed commercial real estate funds to determine if they have any interest in buying these loans ranging in size up to almost $10 million.

Rocky road, anyone?

Need help finding the right real estate bridge lender or telling your story the right way for your California commercial real estate? Read "Matchmaking for Business Loans" and give me a call!

Tags : commercial real estate loans , commercial real estate , real estate bridge loans , private money loans

Crisis Approaches for Commercial Real Estate

More trouble is on the way for commercial real estate loans according to The Wall Street Journal (subscription required).

The delinquency rate of $700 billion of securitized loans backed by commercial real estate has more than doubled in just a few months. More bank failures are projected as experts forecast that the banks will get saddled with as much as $250 billion of losses on commercial real estate.

It gets worse.

In the next three years, almost $675 billion of commercial real estate loans mature. With declining property values and lower cash flows, it's very unclear how these loans will be re-financed in this tight credit environment.

I had coffee yesterday with a private money bridge lender for commercial real estate loans. They continue to raise more money to lend against California commercial real estate properties. Though they typically lend no more than 50 percent of fair market value, they can close on a commercial real estate loan in as little as a week. Rates start at 8.5 percent with a couple of points paid at closing.

Need help finding the right bridge lender or telling your story the right way for your California commercial real estate? Read "Matchmaking for Business Loans" and give me a call!

Tags : commercial real estate loans , commercial real estate , bank failures , real estate bridge loans , private money loans , California