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Proper commercial financing can greatly enhance a commercial location, while poor financing can squander an otherwise excellent location. Many commercial projects in good locations have been ruined by poor financing, and it is not at all uncommon to find commercial projects in marginal locations that have been successful because of strong financing.

When looking at the physical property itself, commercial lenders usually analyze:

  - The size of the facility
  - The parking situation
  - Drive-by appeal
  - On-site amenities
  - Physical and mechanical components of the building
  - Functional and economic utility
  - Physically and economically obsolete aspects

In assessing most of these elements, common sense may be the most important tool. To illustrate this point, consider an apartment with no bathroom or a “full-service” hotel without adequate parking. Commercial lenders must be able to judge the project for its current and future market appeal, and function plays a large role.

Lorenzo Hills, managing director of East Coast Commercial Finance, is responsible for the origination, analysis and placement of real estate debt and equity investments nationwide. Lorenzo is located in Charlotte, N.C., and can be reached at 980-226-6746.

rickh :: Oct.29.2008 :: Finance, Real Estate :: No Comments »

Commercial real estate lending is seen as a secure place to invest, even though a bank or other investment firm might be adding more money into it. Major financial institutions are very strict about which businesses receive these loans.

Commercial real estate loans may not have slightly lower returns, but the investment is more solid. That is particularly important for businesses sitting on more liquid assets than they are comfortable with.

judyh :: Jun.26.2008 :: Business, Finance, Real Estate :: 4 Comments »