I am reading that between $875 billion and $1.5 trillion in commercial debt is maturing this year. And that is what I am seeing. I talk to commercial borrowers every week who took out five and ten year loans in 2016 and 2021 when rates were low and banks were lending freely. They are coming due now, and the lending environment they are returning to is nothing like the one they left.
Banks have tightened up significantly, and if your property is in apartments, assisted living, hotel, office, or retail, valuations are still soft across the board. The NOI that supported your original loan may not qualify you for a full refinance under today’s standards, and that gap between what you owe and what you can currently borrow is exactly where deals are falling apart. Traditional lenders are not stepping up to bridge that difference, and most of them are not interested in trying.
What I am seeing work right now is private credit, bridge lending, and non-conventional commercial loan programs, in today’s market called non QM. These lenders do not have the same requirements as a bank. They will lend on pro-forma value, underwrite to the property’s actual cash flow instead of your tax returns. If your property performs but your returns show paper losses from depreciation, that is exactly the kind of deal these programs are built for.
The DSCR loans have more rate stability right now . Traditional commercial rates have been all over the place as the 10-year Treasury reacts to inflation data and everything else going on globally. DSCR lenders price off the property’s cash flow, not the bond market, so those rates have stayed far more predictable. That matters when you are trying to close a refinance and need reliable numbers.
This is what I do at Commercial Capital Ltd. I place deals nationwide across private, bridge, DSCR, and non-bank commercial loan products (aka Non QM Commercial Loan Programs), and I match borrowers to lenders whose underwriting actually fits your deal. If you have a maturity date coming up or are looking to purchase, give me a call at 512-358-1511 and let’s talk through your project.
If you or you have a borrower that received a bank decline but the deal still makes sense, call me at 512-358-1511 and we can walk through it.
No obligation. Just a conversation or get started by filling out this form!
Karen Schimpf
Commercial Loan Advisor
512-358-1511
karen@applycommercialloans.com
www.ApplyCommercialLoans.com
P.S. We are also seeing a lot of activity in residential investment and small apartment fix and flip deals. These typically start around 70% loan to value. If you do not have a lot of experience, a seller carry of up to 20% can help bridge the gap going up to 90% CLTV. For experienced flippers with good liquidity, financing can go up to 100% of the project. The more experience you have and the stronger your liquidity, the higher the leverage options. If you have a deal you are working on, call me at 512-358-1511 and we can structure it.