Experienced Kansas City Construction Law Firm

An overview of the commercial lending market

On Behalf of | May 8, 2017 | Commercial Real Estate

Nationally, the commercial real estate lending market has begun to tighten as lenders begin to hit capital control restrictions. Other regulatory restrictions may further tighten the commercial real estate lending market. However, those looking to develop Colorado properties may find that there are plenty of opportunities to borrow money. This is because commercial real estate markets correlate highly to local economic conditions.

Furthermore, local lenders may be willing to invest in their communities because they have a better grasp of market conditions. National lenders may shy away because they don’t have a good enough understanding of the risk that they are taking. On the other hand, local lenders tend to be smaller, which may limit how much they can afford to lend at any given time. The CEO of Verus Bank of Commerce in Fort Collins also mentioned that larger investors tend to enter and exit markets on a whim.

However, a local bank may be willing to lend during both good and bad economic times. The CEO claimed to have the highest growth rate during the recession, and he also said that there were still plenty of ways to access capital. Another person in the financial industry said that banks may tend to loan less money as opposed to not lending at all.

Developers who are looking to finance a commercial property project may wish to work with local banks who may be closer to the community. This may make it easier to get financing at terms that are acceptable. Prior to signing the loan document, however, it may be a good idea to have an attorney review it in order to see if it contains any provisions that could prove to be problematic in the future.