Peak Capital Group, LLC Sees Up to 75% of Commercial Real Estate Lenders Tightening their Standards

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Following twelve months of credit tightening within residential real estate, Peak Capital Group asserts that the commercial sector is beginning to show the same signs of stress that may ultimately lead to its collapse, much like the Subprime and Alt-A markets have experienced. The extent of the decline will be directly tied to the consumer confidence and the willingness of lenders to make loans readily available.

Following twelve months of credit tightening within residential real estate, Peak Capital Group asserts that the commercial sector is beginning to show the same signs of stress that may ultimately lead to its collapse, much like the Subprime and Alt-A markets have experienced. The extent of the decline will be directly tied to the consumer confidence and the willingness of lenders to make loans readily available. A very recent poll of commercial lenders made it clear that 75% are currently tightening their underwriting and lending standards, and as a result, Peak Capital is helping a myriad of turned down borrowers. This response is a clear indication that there are troubled waters ahead for this sector as well as the construction sector.

The lenders are feeling the increase in delinquencies, under-budgeted projects, as well as the regulatory demand to show liquidity on their books and the need to have adequate reserves for their loans. This has been the driving force and concern for many of the banks that lend in this space. The banks' reaction has included freezing requested construction draws and calling loans where the current value decline makes the loan security unable to meet their safety ratio. This action creates an immediate disaster for the borrower, who is now forced to go out and attempt to secure financing at a time when the capital is just not available. The result is that many projects that are destined for success are being derailed by factors outside of the developer's control.

Gil Priel, Managing Director of Peak Capital Group, LLC a private equity fund backed by a $12B net worth, states that they recognize that "this space is broken and is looking to provide the much needed liquidity to help stabilize those projects meeting our underwriting guidelines. Our capital is available to borrowers who need to complete their projects and reach a point where there is availability of conventional financing." He added "Utilizing our bridge loans allows a borrower to complete their project for sales or stabilizing the property with rentals. Peak Capital Group is unique in that they will look at cross collateral on a national scale to add security to the deal. This means that commercial, as well as residential borrowers can get the additional funds they need very quickly and without all the red tape.

Priel concluded, "It is clearly in everyone's best interest that projects that make economic sense find the capital to deliver on that expectation of success." In these cases the borrower gets the project completed, the original lender is able to inject liquidity by either being paid off, or at times by subordinating to a new loan and the consumer is able to purchase a superior product.

Peak Capital Group is a direct portfolio lender providing fast, flexible, asset-based lending and construction completion loans for borrowers and/or properties that do not meet conventional underwriting guidelines.

For more information on Peak Capital Group, please visit them at http://www.PeakCapGroup.com .

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Shoham Nicolet
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