Commercial Property Loan and the New Year

property loan

The New Year has arrived. Congratulations to everyone on making it this far. I took a couple of weeks off to recharge my batteries and visit with family and friends over the holidays. I hope that everyone was able to do the same. So, let’s take s quick look at how the New Year changed the status of the commercial property owner and the search for viable commercial property loans.

Has anything changed in the last couple of weeks regarding the economic recovery? As usual, there have been multiple indicators showing conflicting signs as regards the state of the recovery. Home sales are up for 9 months. Now, last month they show a 16% decrease when the experts were projecting a 2% decline. Anything to worry about? Not really. The recovery is taking place, it just is going a lot slower than most people think or want to believe. Car sales increased because of “Cash for Clunkers.”

Residential sales increased because of the instant tax credit to home buyers by online post and the decrease in sales prices due to foreclosures and short sales. The November jump was precipitated because of the fear of losing a tax break, which has now been extended and even increased to include more potential buyers. Will this put a stop to the residential foreclosure crisis? I don’t think that it will even slow it down. Not until we start producing JOBS!

Where does this leave the commercial property owner? Who is out there leading the charge to protect this essential part of our economy? The administration? The banks? The Fed? Are loans any easier to find now that we’re in a new decade? Are lenders looking for more or less equity to do a loan? Personal recognizance? Lines of Credit? These questions pose problems not only for commercial property owners but also for all small business owners and entrepreneurs. The small business owner is the driver of the economy and we are not doing enough to make sure that they survive and prosper.

Without job growth, there will be no sustained recovery. Without job growth, there will be no increased rental rates. Without increased rental rates there will be no increased cash flow or property evaluations. As a consequence, more and more property owners will face the prospect of default and foreclosure. This will make the banks even more reluctant to provide commercial property loans or lend to the small business community. Are there any possible solutions out there for both lenders and owners? Can we work together to stop the potential commercial real estate meltdown of 2010?

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