Monday, July 2, 2007

Larger Loans - Better Rates

If you need more money, you get better rates. That's not an addage that bankers go by, although, they sure seem to act that way. The lowest margin commercial (read conduit) financing starts at loans above $2,000,000. Margins over the 10 year approaching 120 basis points. The same loan under $1,000,000 and you may be paying margins of 190 or more basis points. Not fair in my book. Something must be said about a larger investment property providing more stability in a market. Especially in a less costly market, where a $3,000,000 shopping center IS significant. Not so in the Bay Area, where the donut shop I patronized today would sell for that amount. My eyes glaze over...

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