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The commercial
mortgage market is going through some dramatic changes in Canada.
The industry is moving towards securitization as an alternative
to the traditional balance sheet lending of the big banks and
insurance companies. Foreign players are aggressively entering
the Canadian market and providing financing for non prime "B"
and "C" Borrowers.
With the addition
of these new players, and the move towards increased
securitization, the Canadian commercial mortgage market is set
to grow.
Securitization
is leading to a greater availability of funds and greater flexibility
in the types of properties that can be mortgaged. In the past
decade the banks and insurance companies have shied away from
all but the best of properties and borrowers. The banks are slowly
starting to become more aggressive and the new entrants to the
industry are picking up the slack. This bodes well for potential
borrowers.
Typically,
the larger players will only begin to look at commercial mortgages
in excess of $2 million. There is a shortage of funds available
for smaller commercial mortgages but this is changing with the
addition of the new entrants.
Right now
there is an abundance of funds available for residential apartment
complexes and a growing availability of funds for the smaller
store + apartment properties. Small industrial condos and single
use facilities still face difficulty obtaining financing from
traditional sources.
The pricing
of commercial mortgage rates and fees is as varied as the players
in the industry. Each property and borrower is unique. It is impossible
to quote rates and fees without a thorough understanding of the
property and covenant involved in the transaction.
If you are
in need of a commercial mortgage we would be happy to discuss
your options with you.
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