Multiple industry trends have helped keep commercial lending strong this year.
Learn more about these trends to see where your business can take advantage.
A number of factors have made the commercial real estate mortgage industry more dynamic in 2017 than ever before. More and more non-traditional lenders have entered the game, leveraging the latest integrated workplace technology to speed up the underwriting process and get an edge over established mortgage firms. As a result, commercial lending has stayed strong in 2017, even in spite of developments that might be expected to derail this consistent growth.
Lead by a major rise in commercial mortgage–backed securities, the commercial real estate mortgage industry performed especially well between March and June of this year. Urban Land, reporting data compiled by commercial real estate firm CBRE, said that commercial loan closings not only continued to rise between March and June but also finished 27% higher than the previous year.
Researchers from CBRE noted that pension funds, insurance companies, banks and other non-traditional lenders are actively investing in commercial mortgage-backed securities (CMBS). This diverse source of growth has been a major factor in helping the industry stay strong despite a myriad of potential problems.
The first potential snag that the lending market has seemingly overcome in 2017 is ongoing action by the Federal Reserve to raise interest rates that directly impact commercial real estate mortgages. Typically, interest rate hikes can discourage borrowers from taking loans or limit the amount of funds they choose to borrow.
According to Forbes, much of the potential issues have been offset by companies trending toward 5-7 year financing periods, allowing borrowers to refinance as their investment plays out. This flexibility is a strong incentive for borrowers to consider a commercial mortgage in spite of the increase in interest rates.
The National Association of Realtors also reported that large segment of 10-year commercial real estate mortgages, taken out between 2005-2007, were scheduled for refinancing between 2015-2017. Many experts suspected that this wave of refinanced loans would be detrimental to new loan growth this year. On the contrary, the number of transactions that have failed during the refinancing process have decreased over the past few years rather than spike. This unexpected stability has clearly been a major contributor to the strength of the lending market in 2017.
A Strong Commercial Lending Market Could Propel Your Business
More flexible lending conditions across the industry have undoubtedly played a role in sustaining a healthy lending market. Likewise, greater availability of short-term commercial loans have encouraged businesses to pursue new business opportunities. Any company that can leverage access to rapid capital or have long-term financial goals can directly benefit from market conditions in 2017.
Find out what you’ll need to take advantage of commercial lending opportunities
Want to make the most of the healthy lending market? You’ll be in a strong position to maximize a commercial mortgage by working with an experienced professional. By taking advantage of their expertise, your company stands to deploy a practical financial strategy in 2017 with the promise of a high ROI. Don’t miss out on this chance to pursue your company’s most ambitious business goals this year.
Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC Private Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.