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Oil Price Spikes Impact On Commercial Real Estate

  • June 10, 2008

Possible Impact Of Offshore Drillings On Commercial Real Estate Values

I’m often asked how commercial real estate has been impacted by the recent spike in oil prices. With the recent rises in gas, ripple effects can be felt throughout the commercial property sector. For this blog, I will focus on one group that has been impacted: the retail strip mall. During the last five years a plethora of small/midsize strip malls were constructed. Many of these strip malls were finance or purchased based on a very low cap rate (5-7%) and very high $/ft rental rates.

As gas prices have increased many of the smaller tenants are struggling and unable to afford the high initial rents. As a result many are moving to lower rent centers or renegotiating their current rents. This trend has accelerated as gas prices have continued to rise.

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Small Balance Commercial Lending Changes

  • June 5, 2008

I am frequently asked if the residential mortgage crisis has impacted commercial lending. Unfortunately the resounding answer is yes. Small Balance commercial lenders and hard money commercial lenders have been tremendously impacted by the credit crisis. In this blog I will discuss one impact of the current credit crisis. Future blogs will delve into further impacts that have occurred/are occurring.

As a result of the crisis, underwriting standards have changed substantially for both small balance lenders and hard money lenders. Many of the players in this arena are no longer in business. If the lenders are still in business the parameters for writing loans has changed drastically

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Fairview Lending, and the objectives of this post

  • May 4, 2008

Fairview Lending, and the objectives of this post

My name is Glen Weinberg. I am one of the founders of Fairview Commercial Lending. I graduated from IU with a triple major in finance, operations management, and finance information systems. I have worked for 3 fortune 100 companies in various roles from operations finance, mergers and acquisitions, and finance information systems. I also assisted in the CH11 reorganization of a small high tech company. I have been published in The Scotsman’s Guide, The Mortgage Press, The Niche Report, and the Colorado Real Estate Journal. I have also trained brokers in hard money lending at the Mortgage brokers forum in Las Vegas, and will be speaking in Orlando 3/25 on hard money lending at and NAMB training session for mortgage brokers on hard money lending. I have been investing in real estate since the early 90s as well as extending private notes on real estate.

For many years various partners and I were extending private loans to individuals throughout the southeast secured by commercial real estate. A need was recognized that there was a void in private lending nationwide. There were folks with stated/light doc programs (Interbay, SilverHill, Lehman Brothers, Metwest, etc…) and then there were very expensive hard money commercial lenders. The stated programs had minimum credit scores in the mid/high 600s. The expensive hard money lenders had large upfront fees (many times >10k) and commonly practiced the art of bait and switch to collect these large upfront fees.

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