Midwest Capital Funding Offers Exclusive Insight Into CRE Finance Council's Predictions for 2015

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Latest Commercial Real Estate Finance Council survey predicts higher loan volume, benchmark interest rates in 2015 -- Taylor W. Grace of Midwest Capital Funding explains what this means for the market.

Kansas City Mortgage Brokerage Firm

Midwest Capital Funding

In addition, the CREFC survey reports that the commercial real estate industry will become home to increased risk-taking and more lenient lending, according to the National Mortgage News.

This growth won't happen immediately, however. According to a National Mortgage News article (1/5/2015), Congress' failure to extend the Terrorism Risk Insurance Act (TRIA), a law that financially backs up potential losses resulting from terrorist attacks, into 2015 could chill the commercial real estate market.

Taylor W. Grace, Managing Partner of Midwest Capital Funding, says TRIA's expiration will make many lenders re-consider the risks of damage to their collateral.

"With the expiration of TRIA, it may cause commercial real estate lenders to re-examine the risks relating to potential terrorist attacks," Grace says. "Many commercial insurers will not cover such a loss, so TRIA was put in place to provide a governmental alternative to mitigate the risk."

Despite this small hiccup, Grace says commercial real estate will see continued concentration in multi-family and office buildings throughout 2015. Midwest Capital Funding, in particular, will focus most on industrial and multi-family properties this year.

"At Midwest Capital Funding in 2015, we will be focusing on industrial and multi-family property types," Grace says. "However, despite this being our focus, we will continue to assist our clients with any of their commercial property finance needs. For example, we are already working on office, retail, hospitality and land development property types this year."

In addition, the CREFC survey reports that the commercial real estate industry will become home to increased risk-taking and more lenient lending, according to the National Mortgage News.

"It is evident, based on both recent transactions and those that are pending, that financial institutions will be more comfortable with taking on risk in 2015," Grace says. "This includes things such as increasing leverage advance levels, decreasing covenants and widening the scope of projects types on which they are willing to lend. However, it is important to note that excessive risk taking, such as that present during 2005-2007, has not yet re-entered the marketplace."

Ultimately, Grace says he believes 2015 will see the commercial real estate market continuing its ascent out of the recession of late last decade.

"The continuing wave of maturing commercial real estate loans that were made during the recession, as mentioned in the article, is going to be one of the main drivers of loan volume in 2015," he says. "This, combined with the fact that this era of loans was the most aggressively underwritten, with many on an interest-only basis, will make the 2015-2017 wave of refinancing very interesting."

About Midwest Capital Funding:

Midwest Capital Funding is a full service commercial real estate finance firm. They can assist with acquisition loans, refinances, permanent loans, and construction loans. To learn more, visit http://midcapfunding.com

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