Browsing: Commercial

Commercial Real Estate

I was surprised by some of the comments regarding Dr. Doom AKA Nouriel Roubini and his predictions that we are not yet out of the economic woods, and we are most likely going to experience continued turmoil in our economy in general and real estate specifically.

To the point – it seems that everyone is now paying attention to the coming challenges with the commercial mortgage market.  And who can blame anyone for thinking that the commercial market is on the edge, and will likely go right over the side in the coming 2 – 3 years.

Using Old Valuations Can Lead to Disaster!

Making this situation worse is the fact that most lenders are valuing the underlying properties collateralizing their mortgages at their original values (just like what is happening with residential properties), further forestalling the pending crisis in bank defaults.  If banks revalued their portfolios to the real (current) values of their underlying collateral… it is possible the entire system would collapse. I found an interesting dialogon public radio amongst various experts regarding the pending (actually it has already started) commercial collapse that demonstrates that some people may have their head in the sand. 

Commercial Real Estate

Executive summaries are one of the most important aspects of commercial loan package submission, however, many new investors spend the least time and energy on this essential component.  I recently had the opportunity to interview Lori McMahon of LJ Commercial Property Services.  She creates and submits executive summaries as her profession and is considered to be an expert in the field.  Below is a list of questions and answers exchanged by a new commercial real estate investor and Lori.

Commercial Executive Summary Q & A

1. Q: At what point do you begin putting together the Executive Summary? Before/during/after contract has been submitted?

Lori: It’s different every time. Before is fine as long we put that in as the status on the Funding Opportunity Page. Many of clients have wanted to find out if they could get any interest prior to signing the Contract to Purchase. Anytime is good as long as it is directly after you sign the contract because you must understand that in these times, it is taking anywhere from 45 to 90 days for funding…