COMMERCIAL FINANCING FOR RETAIL SHOPPING CENTERS
Loans for Refinancing Shopping Centers
Commercial mortgage loans come in three forms: acquisition, refinance, and development. No matter where you stand, there may be an option for you. We can secure loans for you no matter the size of your establishment, from big-box chains to small local shops; if you need refinancing for a shopping center, look no further than us.
Your tenants should be unique yet cover all the bases for the average consumer. This is important due to market conditions being taken into consideration, as well as tenant agreements such as leases and loan repayment statuses.
Standard Terms for Retail Center Commercial Loans
- Acquisition or refinance of a retail property
- Bank, conventional CMBS, and insurance financing available
- Fixed rates are between 5-20 years
- Flexible prepay options available
- Interest-only options
- Non-recourse options
- Single, multi, credit, and non-credit tenants acceptable
- Max of a 30-year amortization
- Max of 75% LTV
- 1.25 minimum DSCR (debt service coverage ratio)
- $500,000 minimum loan amount
Backed by commercial real estate and provided by banks, credit unions, savings, and institutions.
Suitable for buying retail centers at a discount and selling relatively quickly. The duration of holding onto assets before selling is typically 2-3 years.
Stands for Commercial mortgage-backed securities. These are fixed-income investments that are backed by commercial property mortgages. CMBS’s can provide liquidity to investors and lenders.
A life insurance company provides them for financing apartment buildings, industrial or retail properties, and offices.
These loans are offered to real estate owners for mortgages or to purchases existing mortgages or securities.
Why Elect to Refinance in the First Place?
A major reason for refinancing is to avoid being slapped with a massive balloon payment. Balloon mortgages vary, and each has its own finer details. However, these mortgage plans involve a large amount at the end.
Some of these mortgages require both a large final payment along with monthly payment as well. The balloon payment is due to the monthly payments, and factoring in interest doesn’t cover the entirety of the loan. That is the key difference.
In traditional loans, the borrower makes larger regular payments and pays interest monthly. This directly results in the loan being paid off in full and on time. By doing so, no more money is still owed, so a balloon payment is not required.
Pros and Cons of Refinancing
- May lock in a lower rate
- Lessen the length of your loan
- Provides access to equity
While there is no way to predict your potential savings, many things can change since you initially financed. If the market is in a better place now than then or the value of your property increased or decreased, it can have an impact on your potential new loan.
- May not save as much as you’d think
- Can take time
- There are fees associated
As with all things, there are negatives. You will need to consider the cost of refinancing, the potential savings, and how much you are currently paying to find out if refinancing is your best option. It can also take a lot of time to secure a new loan, not to mention resources; it just might not be reasonable.
Are You Thinking About Refinancing a Shopping Center?
We want nothing more than the success of your business. With many years in service, we can provide you with the help you need. If you believe refinancing is your best option or simply want to know if you can get a better interest rate, run your situation by us!