
Spotlight on Local & Regional Bank Financing
This month’s spotlight focuses on local and regional bank financing. The local and regional banks in our markets make up a substantial portion of the real estate financing activity. While not always the most aggressive lenders on commercial assets, the relationship-oriented nature of bank lending often gives borrowers comfort in knowing a transaction will get done.
Local and regional banks have been quite active in financing commercial properties such as retail, office, and industrial, while not as active in multifamily financing in the recent past. While there are some exceptions, this is primarily due to the competitive nature of multifamily financing and the multitude of lenders willing to offer long-term, fixed-rate financing solutions, which most smaller banks can’t compete with.
Alternatively, these banks are a good source of capital for value-add and mini-perm debt, and can be a great source for construction capital. Local and regional banks are a critical part of the real estate community, especially for loans between $500,000–$5,000,000, and provide flexible capital to the market.