Financing Commercial Real Estate

Financing Commercial Real Estate?

Good news is just out from the National Association of Realtors in a recent article, “Lenders Return to Commercial” by Lawrence Yun, written for the nation’s largest association for real estate professionals (NAR) publication, REALTORmag

According to Yun, “The improving economy and an improved lending environment are the primary reasons for the gains. But it is the second factor—lending—that is making the biggest difference. In our latest survey of commercial practitioners, 42 percent said they’re seeing credit easing.”

Yet, there are still hurdles to overcome, states Yun, including the requirement to put at least 30 percent down on commercial real estate purchases. The reason for these tight restrictions, according to Yun, is that the majority of commercial transactions are under $1 million and are most often funded by small community banks. Without the backing of federal programs like FHA, Fannie Mae, and Freddie Mac, as in residential lending, commercial lenders have reason to be additionally cautious.

At CERRON Commercial Properties, we are indeed seeing an increase in commercial transactions, due in part to the community banks lessening some of their requirements. If you are considering purchasing a commercial real estate property and need to choose a lender, our team recommends you review our “How to Choose a Commercial Lender” checklist, as you make this important decision.


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