Florida commercial real estate growth stifled by strict lending

Florida commercial real estate growth stifled by strict lending

Going through a commercial real estate transaction can be exciting when progress is made, but it also can be frustrating when things don't go as planned. Disputes are one of the biggest roadblocks to a successful commercial real estate deal, and prolonged negotiation is often necessary to attempt to reach a solution that both parties agree on. Currently, another major roadblock in Florida appears to be commercial lending.

Lenders today seem to be getting more stringent than they were in the past when qualifying applicants to borrow funds for commercial deals. Virtually perfect credit is necessary in order to get the best deals. As a result, many borrowers are being turned down, which officials say is hampering the state's recovery from the recent recession.

In fact, most commercial transactions in the southern part of Florida currently are cash deals. Before the economic recession, lending standards were lax, and many say this essentially caused the crash of the real estate market. Now, the standards are too strict for fear of another recession happening, but this actually is keeping the economy struggling.

A commercial real estate deal may move along perfectly from beginning to end, but often, something goes wrong along the way. It is important to take into consideration a wide range of critical matters, such as tax law and banking, while also striving to cooperate with city officials and other parties who play an important role in the deal's success. By understanding how to handle each potential hurdle, a commercial real estate transaction can end up as a promising investment in Florida.

Source: news-press.com, Credit Catch-22 hampers Southwest Florida real estate market, No author, March 1, 2014