What the Maturity Wall Means for Your CRE Investments
Fairmount Funding, LLC
Fairmount Funding is here to provide straightforward financing solutions to borrowers who prefer not to deal with banks.
Preparing for the Wave of Commercial Loan Maturities in 2024
A large volume of commercial real estate loans is set to mature in the coming year, a scenario often referred to as the “maturity wall.” For investors, this means increased competition for refinancing and potentially tougher terms from lenders. So how do you prepare?
Here are steps to help you navigate the maturity wall:
1. Start Early: If you have a loan maturing in the next 12-18 months, now is the time to begin the refinancing process. Getting ahead of the wave will give you more options and negotiating power with lenders.
2. Review Your Financials: Lenders are going to scrutinize your property’s performance closely. Ensure that your financial statements are in order and reflect strong, stable cash flows. If your Debt Service Coverage Ratio (DSCR) is weak, consider cutting expenses or raising rents where possible.
3. Increase Property Value: Adding value to your property through renovations, energy-efficient upgrades, or tenant improvements can make your asset more appealing to lenders and give you leverage to secure better terms.
4. Explore Alternative Financing Options: With the volume of maturing loans, traditional lenders may become more selective. Look into non-bank lenders, private equity firms, or joint ventures as alternative sources of capital.
The key to navigating the maturity wall is preparation. Don’t wait until your loan is due—start working on your refinancing strategy today.
#howtorefinance #brokerorlender #willyourbankhelp #commerciallending #realestate