Sorry, We’re Closed!

Sorry, We’re Closed!
By: Nicholas A. Dunlap, CPM

Recently published data by TREPP shows that small, regional banks across the United States are being tapped out by non-performing, commercial loans. This truly unfortunate scenario marks what some feel could be the proverbial “tip of the iceberg” of the current/looming commercial real estate debt mess. Local financial institutions dot our communities nationwide and often issue these commercial loans as a way of endearing themselves to the local business community. These banks overextended themselves unknowingly in an attempt to enter the commercial mortgage marketplace. Ultimately, this has resulted in the undoing of approximately 13 banks nationwide.

Similarities can be found between the relationship based lending of the sub-prime mortgage meltdown and the willingness to boldly go where “their bank hasn’t gone before”. Focusing on fundamentals as opposed to relationships will likely keep your local institutions’ doors open.

View the data from the study here: