Commercial Loans are Still Being Funded!
Thinking of purchasing a distressed commercial property? You may want to consider using private equity and the viable regional banks as part of your asset acquisition strategy.
If you prepare your loan request properly you can still get rates 300-500 bps over Libor if you have access to the right lender for your project. If you need quick close bridge financing then your going to be looking at rates in the high teens when its all said and done.
Even in these credit challenged times, there are several quality lenders and regional banks making commercial real estate loans. It’s critical to know exactly how to present your project to the committee. You need to show and tell the lender what your stabilization or exit strategy is and more importantly why you, the sponsor, is qualified to manage the target asset properly. Heads up – The committee will be looking for new mandatory data, things they never really asked for before. For example, you must have a realistic projection of what your future capitalization rate is, current and future absorption rates and vacancy rates in comparison to local unemployment trends and future employment projections for that local market. They are also using the new Global Debt Service Coverage ratio that I will blog about soon.