Big Bank Collapses and Borrowing Money
The biggest concern for most commercial real estate investors is typically the prospect of a higher-than-expected interest rate hike. That all changed recently when two of the nation’s largest banks collapsed in a 72-hour window. These closures triggered extraordinary steps by the federal government and the Federal Reserve to stabilize the financial system.
Now, there is a cloud of uncertainty for real estate finance as lenders try to contain the fallout of the second-and third-largest bank failures in American history.
Two trends were already going against the real estate community — higher interest rates and lower valuations, but these recent bank closures will just tighten up underwriting further, including for credit facilities. Real estate capital values, which had already been falling, will be further pressured by an even more tightly constrained credit market.
So what are real estate investors to do?
Where To Go to Get Your Next Loan for Refinancing or Acquiring Property?
The federal government’s decision to protect the customers affected by the recent big bank closures, helping keep the market somewhat stable, the Fed has injected new uncertainty into what had already been a confusing market.
While the dramatic nature of these bank implosions is expected to drive further turmoil for real estate investors as debt becomes even harder to come by, alternative lending options like Community Capital become even more attractive options for savvy borrowers or first time investors.
Big banks, super-regional, regional and small, community banks are all going to be much more reluctant to make loans right now based on the recent collapses and precarious situation for traditional lenders. These failures will likely accelerate the prevalence of alternative lenders like
Community Capital in commercial real estate deals as banks step even further away from loans altogether, particularly the ones they deem as “risky” deals.
Despite this current volatility, non-conventional lenders like Community Capital will play an incredibly important role in strengthening the Florida economy and funding the influx of real estate deals. By offering quick decisions, more diversity and adding value to borrowers and access to lending for local, smaller businesses, we’re here to say yes as the big banks start saying no.
Banks may be reluctant to fund your next real estate investment, but Community Capital is ready to lend. Let us help you secure your next loan with terms that work for you.
Click here to connect with the experts at Community Capital Holdings.
