Find out WHAT Commercial Real Estate properties have the highest percentage of lender rejections…
July 9, 2012 Leave a comment
- Single tenant restaurants unless it’s a one of two national chains…
- Single tenant properties where the tenant is paying an extraordinarily high rent compared to the rest of the market.
- Properties that are purchased at a cap rate well below the cap rate floor established by the lender.
- Single tenant properties with a short term remaining on the lease (less than 10 years). You can mitigate this issue by using a short amortization period.
- Properties located out in the middle of nowhere. They usually have to be within 40 miles of a decent sized city (doesn’t have to be a major metro area)
- Metal Industrial buildings
- Single tenant properties with weak tenant financials (i.e. some national “big-box” stores that continue to lose market share to their competitors…)
- Borrowers with credit problems
- Multi-tenant properties where the major tenants have leases expiring soon and are paying above market rent
- Non-stabilized properties
- Non-recourse financing for loans under $3,000,000
- Fractured condo properties
Want to find out what lenders are looking for? Comment here…