Tuesday, April 07, 2009

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

No comments: