Commercial Banks Still Frightened by Covid

Tam-Bay Commercial Realty, Tampa FL Commercial Real Estate Broker

First two months of the pandemic had investors running scared, cancelling contracts, keeping money in the market only to take a hit.  But we’re resilient and making a strong comeback. Investors are investing, buyers are buying, and sellers are selling.  That’s great, right?

Not so fast!  Commercial Banks are NOT lending, period!  When the pandemic hit, they said they were too busy working the PPP loans. Now they are simply saying “NO”. Their appetite for lending changed due to the Coronavirus, with uncertainty in macroeconomic market conditions. Banks are only refinancing existing loans, and not originating new loans.

Example: I have building under contract at the entrance of a Regional Shopping Mall. Buyer is paying $1.5 Million CASH. He wants to take out a loan for $2 Million for improvements. Every bank I took it to said NO upon initial conversation.

Example: I have a daycare center under contract for $1.4 Million. Buyer is seeking SBA Financing.  Finally found a lender to bite, after several turned us down. The numbers for 2020 were down slightly from 2019.  Why could that be?????

Lack of available financing is going to create gridlock in commercial transactions, and ultimately a crash. If the Commercial Real Estate market crashes, it’s not because of Coronavirus… it’s the banks. Commercial Banks will cause of their own demise.

Do you have a commercial real estate question?

Feel free to comment below or reach out to Tam-Bay Commercial Realty directly on (813) 908-0706.

Tom Brubaker