Wichita KS Realty News

Three things impacting commercial properties financing in 2017

commercial properties and investing wichita ks

WICHITA, KS:  (Wichita KS Realty News)  According to a report by the Mortgage Bankers Association, over $500 billion in commercial real estate loans were originated this past year, indicating a strong financial landscape for lending in the year ahead. The financing market has demonstrated sustainable, dependable growth we can expect to shape commercial properties financing starting today. Low interested rates, steady rental growth, and rising property values are increasing investor activity in commercial real estate, which is presently driving up loans to finance these investments.

Of course, with the beginning of every New Year, many are wondering what the future holds for commercial properties and the financing thereof. Some wonder if the market will continue this upward trajectory of increased lending activity, or will new legislation by our new president have an even bigger impact? Here are 3 major things to consider when pondering these questions:

1. Interest rates: These rates will remain low, at least in 2017, creating incentives to borrowers to refinance their maturing loans in order to lock in lower rates. Though the Fed is going to raise rates this year, the effects won’t be felt for a few years.
2. Availability of capital: There will be a wide availability of diverse sources of capital that will increase lender competition in the year ahead. Strong market fundamentals, like low unemployment rates and increased property values, are fueling a boom in loan originations for commercial real estate assets. Based on these strong fundamentals, it can be assumed capital will remain strong in 2017.
3. CMBS Regulations: A new bill is requiring CMBS lenders to hold onto five percent of the loans they issue as opposed to being able to pass them off as bonds. In anticipation of this new law, many CMBS lenders are adopting more conservative underwriting standards as we speak.

Looking for a local commercial real estate lender?  Here are 3 local lenders you can start with;

Reading for financing in 2017? Take notice of these three upcoming factors.

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Richard Wood

Richard Wood, our Editor and contributing Author shares his insights of the national economic data and helps identify trends in the economy and specifically how they effect the local real estate markets in and around Wichita Kansas.
With a top down approach, his focus starts with the Federal Reserve policy makers and their direction on interest rates. Employment, housing starts, and refinancing of current mortgages all come into play when trying to understand how they fit together. Even generational housing trends are important and will be discussed.
Richard brings more than 30 years of knowledge of these markets and will assist the reader in better understanding how they come in to play.

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