Commercial Real Estate Financing
“Toronto Commercial Real Estate Financing Can Come In Many Different Forms”
The Toronto commercial real estate financing market is becoming more and more interesting these days in a number of ways.
First, there is tremendous competition among banks and institutional lenders for what we can “A” deals with the strongest getting access to some incredible rates.
At the same time, its also not hard for a pretty good deal (or at least one that would be considered as such just a few years ago) to fall into the secondary bank and term lender financing rate categories. These are still great rates in the current market, but typically one or two percentage points above the very best rates out there.
What’s probably most surprising in Toronto commercial real estate financing these days is the amount of private mortgage money floating around and the types of rates being offered. In many cases, private lenders are competing directly with secondary banks and term lenders for commercial real estate mortgage financing deals.
On larger deals, private mortgage financing can get as low as 6% per year which is a rate level that has rarely been seen if ever in recent history on private money.
Part of the reason for some of the lower rates available through private lenders is that many privates are being more cautious about where they put there money these days. The stock market has not inspired much confidence in over a decade and the residential mortgage market for sub prime lending is still viewed to be pretty risky.
So many privates that have available money are looking to sink it into good solid commercial properties where the loan to value ratios are no higher than 60%.
And because of the more conservative approach being taken in lending in general by banks and institutional lenders, there are more of these types of deals available for private lenders to consider as well.
Keep in mind to that its not all about interest rate. Many business owners and property owners have seen less than stellar operating results during the last two years and as a result they may not qualify for conventional bank financing. With private mortgages also offering short terms with open buyouts, there isn’t much of a drop off when forced to go down market.
The bottom line here is that, depending on your location and the nature of a piece of Toronto commercial real estate property, there can be several different options to consider.
About the Author Joe Walsh
I'm a Toronto Mortgage Broker that arranges mortgage solutions on residential and commercial real estate property. With over 30 years of mortgage financing experience, I'm able to quickly assess your financing requirements and provide relevant solutions for your immediate consideration. Joe Walsh Google+ YouTube Channel