The Coronavirus Crisis is now the fourth commercial real estate crash that I have experienced in my forty years of running our family commercial mortgage company, Blackburne & Sons. They seem to happen about once every twelve years. Each time commercial real estate fell by exactly 45%. To those of you who are commercial loan…
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Conduit loans, also known as CMBS loans, enjoy a fixed rate for a whopping ten years. Unlike a fixed-rate commercial loan from a bank, there is no rate readjustment after five years. The rate is fixed for the entire ten years. And with ten-year Treasuries at just 0.79%, there has never been a better time in…
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George Smith Partners recently released a tombstone about a commercial loan closing that used a financial term of which I had never heard: “George Smith Partners arranged $23,750,000 in bridge financing for the refinance of a 229-key, full-service hotel located in Downtown Minneapolis, Minnesota… The Property, built in 1986, underwent a PIP in 2017.” What…
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When a bank makes a commercial construction loan, it is certainly not going to take all of the risk. A bank will usually require that the developer cover at least 20% to 30% of the total project cost – land cost, hard costs, soft costs, and a contingency reserve equal to 5% of the hard…
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I have a great training article about commercial loans for you today. How do conduits price their commercial loans? After all, commercial lenders cannot buy a forward commitment from Fannie Mae or Freddie Mac, like a residential mortgage banker; yet most commercial loans today are fixed rate loans. How on earth do the commercial loan…
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