To make a commercial real estate development project a success, one needs capital. Sadly, it seems that lenders are still being stingy with commercial real estate developers. Learn more about the issues that CRE developers are facing in today's lending market (and why), and discover how you can improve the outcome of your next CRE development project with a strategic approach and the assistance of a seasoned real estate attorney.
How CRE Trends and the Recession Have Influenced Lending
Since the Great Recession, banks have been less willing to take risks – especially large commercial ones – but there is more to the lending pull-back than the financial state of our country. Trends in the industry, supply and demand, and even the internet are changing how and to whom banks lend money.
Industry trends have always influenced lending decisions, but this time around, the trends are intertwined with supply and demand. Previous booms, particularly in multi-family structures, and decreased occupancy issues that have caused bankruptcy among developers and owners, are partly to blame. For example, apartment complexes have gone under and had to sell (or worse) because they simply did not have enough occupied units.
The internet, or more specifically, online retail markets, are also influencing CRE lending decisions. More people are shopping online these days, rather than in stores, so physical stores are going bankrupt and are forced to close. Because of this, retail stores – particularly those that lack an online presence – are struggling to obtain lending.
Overcoming the Obstacles in CRE Lending
Although it may not be easy to overcome the obstacles in CRE lending, it is possible – especially if you have a plan and the assistance of an experienced attorney. First, consider which markets are performing well right (industrial, built-to-suit projects and pre-leased office space, at the time of this writing). Is it possible for you to capitalize on these markets? When and how? Could the assistance of a strategist, someone that knows and understands the CRE market, help you take advantage of this opportunity? Is there an expert in the industry that you can turn to for advice? Consider all options and, once you are ready to move forward, contact an attorney.
How an Attorney Can Assist with the Process
At Stock, Carlson, Oldfield & McGrath, LLC, we work hard to ensure that our clients are leveraged for a successful CRE project. Dedicated and experienced, our Wheaton commercial real estate lawyers offer personalized assistance with everything from contract reviews to due diligence. Schedule your no-obligation consultation by calling 630-665-2500 today.