Experienced Kansas City Construction Law Firm

Commercial real estate lending

On Behalf of | May 4, 2016 | Commercial Real Estate

Missouri commercial property developers have long depended upon banks as a source of needed debt financing. However, some banks have seen this sector become less profitable compared to other investments.

2015 was largely characterized by loss rates for commercial real estate bank loans that were lower than they had been for many years. Then, according to a provider of financial statistics, loss rates jumped up during the fourth quarter. While this end-of-year trend wasn’t unique to 2015, and resultant losses were still lower than they were in 2008, experts aren’t exactly sure what causes the phenomenon.

Commercial real estate lenders base their decisions on cash flow. When they are making loans to a property that is being developed, they want to see if there are tenants that are lined up. When refinancing an existing loan, they will look at the actual rents that are being paid. As cash flow has generally been good, and as the interest rates that CRE loans can demand are often higher than other forms of loans, banks have stayed in the market. However, regulators have been cracking down on reserve requirements and have noticed with disapproval that some banks have been loosening their underwriting standards.

Commercial real estate development is not without risk, and it requires both equity and debt financing. If banks start withdrawing from the market, alternative lending sources will need to be found. In many cases, experienced commercial real estate attorneys can recommend new types of platforms that may be suitable for their developer clients. Legal counsel can also review a proposed loan agreement to ensure that there are no provisions that could be problematic in the future.

Testimonials

“Long & Robinson was in our corner from the beginning through the end, giving great advice and guidance, and working with us to bring our issue to resolution. Would highly recommend for construction representation.”

— Jeff Wasinger, Vice President – Haren Companies

Testimonials

“Burke Robinson and the Long & Robinson law firm were a pleasure to work with and were also excellent in every way. The firm fully supported a contentious claim, providing guidance and insight at every turn. Although it’s challenging for an organization, as the plaintiffs, to maintain a positive feeling throughout a lengthy process, Mr. Robinson and his team continued to offer encouragement with helpful legal analysis and reporting. A critical part of reporting and case management is a detailed review, understanding and strategy for the complex elements of a claim such as ours and Mr. Robinson demonstrated that in abundance. I highly recommend Long & Robinson to any organization that needs the same kind of legal team as we did.”

— Chris Durkin, Director – One Park Place Tower Condominium Association

Testimonials

“Burke has been absolutely amazing to work with. I feel we have a very unique situation that is rather hard to explain and put all of the pieces together. Burke has been amazing at assisting our HOA and addressing all of our questions in a quick and professional manner. If he doesn’t know the answer he finds it and responds quickly. I would recommend Burke to anyone in need of legal services. Our HOA is extremely happy we found him!”

Testimonials

“I was in the construction business for 40 years. In that time I have had the need for legal help a few times. This firm provided expertise and service that was light years beyond others law offices. We COULD NOT have done better. Thank you so much.”

Testimonials

“We looked at many options and selected Long Robinson based on reputation and our interviews. Burke Robinson has proven to be a great choice.”