The Refinancing Gap
Why the loan you need and the loan the property supports may be different Refinancing Is a New Lending Decision For many commercial real estate borrowers, refinancing begins with a simple assumption: there is an existing loan balance approaching maturity, and the new lender will refinance it. That assumption can create problems. A maturing loan […]
The Rate Increase Is Now a Reality
What Happens Next for Commercial Real Estate? Forty-eight hours ago, First National Insights examined the likely effect of an anticipated 25-basis-point increase in the Federal Reserve’s benchmark interest rate on the economy and commercial real estate. Yesterday, that anticipated increase became a reality. The Federal Open Market Committee increased the federal funds target range by […]
Artificial Intelligence and the Future of Commercial Real Estate
How AI May Reshape Commercial Real Estate, Lending and Property Operations Artificial intelligence is rapidly becoming an important economic force, affecting banking, commercial real estate, hospitality, construction, healthcare and nearly every major industry. For commercial real estate owners, operators, investors and lenders, AI may change how businesses operate, how properties are used and ultimately how […]
The Myth of Expensive Loan Points
Loan points may look expensive on paper, but in commercial real estate development, execution, timing, and lender reliability often matter far more. Jerry Sager explains why experienced developers evaluate financing based on the project’s long-term economics, not simply the fees charged at closing. Read the full article
The Loan Request Is Not the Loan
Why the financing a borrower wants may not be the financing the property supports A commercial real estate loan request usually arrives with a number attached to it. The borrower wants $20 million. The broker is seeking 70% leverage. The financing needs to be nonrecourse. The interest rate needs to be within a particular range. […]
Dying on the Vine: Why Communication Matters After the Underwriting Begins
Every commercial real estate lender has experienced it. A transaction that appears to be moving steadily toward a closing simply dies on the vine. Not every commercial real estate loan request results in a closing, and no experienced lender expects otherwise. Borrowers select competing proposals, investment strategies change, acquisitions fall through, and financing plans are […]
Maturity Defaults are Expensive
Some maturity defaults are unavoidable. Others are self-inflicted. In commercial real estate finance, brokers are often tasked with balancing borrower expectations against market realities. At times, that means delivering difficult news. One of the most common mistakes we see in today’s lending environment is the tendency to reject financeable loan structures in pursuit of terms […]
The Likely Increase in Commercial Real Estate Mortgage Rates: Understanding SOFR and Credit Spreads
Commercial real estate (CRE) mortgage rates are influenced by a combination of benchmark interest rates and lender-specific pricing considerations. Since the transition away from LIBOR, the Secured Overnight Financing Rate (SOFR) has become the primary benchmark for floating rate commercial loans in the United States. As a result, the all-in borrowing cost for most commercial […]
From Rate Cuts to Rate Hikes
A recent Bisnow article highlighted a notable shift in interest rate expectations. Both Bank of America and PGIM have revised their outlooks and now anticipate the Federal Reserve could raise rates three times before year-end, reversing what many market participants expected to be a stable or declining rate environment. The change is being driven by persistent inflation, […]
Commercial Loan Outlook
Commercial mortgage debt rates over the next six months will likely face modest upward pressure or, at minimum, remain elevated relative to the past decade, with significant dispersion depending on property type, borrower quality, and lending channel. While the exact direction of movement will depend heavily on inflation data, Federal Reserve policy decisions, and credit […]