Categorized | Commercial

Commercial Real Estate Recovery Grows Sluggish

Please Share!

For much of this year, the commercial real estate market appeared headed for a certain recovery across the country. However, in certain regions, the market has significantly slowed down, as have prospects for recovery.

Analysts are citing weak global economic conditions, as well as very stringent lending standards as being the two main factors weighing down the possibilities of recovery in the commercial real estate market. Although mortgage loan rates are at tremendous lows, banks are making it more difficult than ever to secure a mortgage loan. As such, the number of commercial real estate buyers has become severely limited.

Many fear that if lending standards aren’t loosened, any hope of recovery will quickly vanish. Rather, the commercial industry may fall into another decline, as supply will once again quickly outpace demand.

Refinancing options for commercial loans are also extremely limited in the current market, which is also contributing to the slowing down of the commercial real estate recovery.

Lenders are insisting that the current standards to secure a new commercial mortgage loan, as well as refinancing, are not overly stringent. Provided a company is fiscally strong, lenders state that they should not have a problem when it comes to financing a current loan, or receiving a new loan for the purchase of commercial property.

However, despite claims by lenders, many commercial property owners have been unable to take advantage of refinancing, and as such, are allowing their properties to foreclose. While some areas, such as Detroit, have been hit harder than other areas, the situation is still negatively impacting many areas across the country.

Please Share!

About Drew Wilson

Drew focuses on the Commercial and Mortgage/Finance categories.

Leave a Reply

Twitter Chat