If you are a borrower and you are lingering, stop! and say yes to your lender. While this advice applies to both residential borrowers and those seeking commercial funding alike, I am focusing on the commercial borrower here.
Commercial lending is getting ready to tighten again. There are many economic signs that point to this. Recent articles in the wall street journal (including this video from today: http://on.wsj.com/1dAKXU7 ) suggest that economic data is not turning out the way many economist had predicted by this stage in the recovery.
Furthermore, many are starting to question the recovery altogether. This does not bode well for sponsors/borrowers in the commercial real estate realm. Whether seeking loans for apartments, multifamily financing, hotel loans, office building financing or commercial loans for real estate of any kind such as bridge loans, equity or joint ventures. Waiting for the 'right' offer from a lender or investor is the WRONG answer.
Take this advise and heed the warning, the markets are telling all of us something very plane and simple. It is clear that economic recovery is slowing. Investors who make bridge loans, who invest through equity and joint ventures or who provide structured financing are getting nervous.
The borrowers and sponsors who understand this and offer their lenders and investors solid returns from 12% to as high as 25% will get the financing they need, but those who believe that 6%-13% offers of returns are plenty should rethink their strategy. The bottom line right now is this, if an investor has made you an offer of financing you should take and close quickly. There may not be another chance.
Dividend America Commercial Lending is a leading origination, processing and preunderwriting platform for non-bank and non-traditional lenders. We represent hedge funds, REITs and Ultra High Net Worth Family Office platforms. Our perspective on the market for financing distressed multifamily, distressed hotel, distressed shopping center and distressed office building assets is unmatched. Furthermore, with a broad range of investors seeking to make investments in businesses, fund to fund investments, land investments and industrial, engergy and mining, we have our finger on the pulse of alternative financing.
To get your trade funded and to find out why we say DO IT NOW and don't wait, give us a call. We help our customers understand how to obtain funding from our clients by helping them understand how to structure their transactions from offer to the closing of funding!
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