Lending conditions continue to remain tight for commercial real estate investments. This is especially pertinent for small businesses and investors looking for properties in secondary and tertiary markets.
In addition to tight underwriting, down-payment conditions also require substantial commitment. According to the 2012 Commercial Lending Survey, 72 percent of closed sales required a down-payment larger than 20 percent to secure financing, with seven percent of loans requiring 50-60 percent loan-to-value ratios.
REALTORS® report that cash transactions account for almost 30 percent of sales.
George Ratiu, Research Economist, writes regular economic columns and conducts research in the areas of commercial real estate, international investments, mortgage performance and foreclosures. He produces NAR’s Commercial Real Estate Outlook and manages quantitative surveys, including the Commercial Real Estate Quarterly Market Survey.