Echelon Property Management

Bank Financing – Better or Worse? February 2, 2010

Until the financial markets stabilize, financing any commercial or investment property is going to remain a challenge.  On January 27, CoStar posted this article: Banks Report Slowing CRE Loan Charge-Offs, that seems to present some mildly positive news on the banking front.  Of course the article is very cautiously (and you might say mildly) optimistic.  Midway through the article, though, CoStar references the FDIC Chief’s comments in another article here: FDIC Chief: CRE Delinquencies, Bank Failures to Keep Rising.  Of course things need to get worse before they get better.  In the interim, though, financing multifamily and investment acquisitions and dispositions will continue to be challenging.

One resource you might find useful is the FDIC website, located at http://www.fdic.gov.  Every week the FDIC lists the banks that have closed the week before.  Last week the following banks were closed down: American Marine Bank, Bainbridge Island, WA; First Regional Bank, Los Angeles, CA; Community Bank & Trust, Cornelia, GA; Marshall Bank, Hallock, MN; Florida Community Bank, Immokalee, FL; and First National Bank of Georgia, Carrollton, GA.

For a complete list of closed banks, go to the FDIC’s Failed Bank List.

All that being said, there are some opportunities in the marketplace.  A strong buyer with a good track record that has shown their ability to bring under-performing properties up to speed is still able (granted with additional efforts that were not necessary two – three years ago) to find potential lenders.  And some buyers with great relationships with their banks and bankers may be able to leverage that relationship to finance a project that would otherwise be unattainable.

If you have a project that you are working on or interested in pursuing, and would like to chat about the challenges you have faced or the successes you have realized, feel free to drop me an email at jmccloud@echelonpm.com, or catch me on twitter: @echelonpm.