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Commercial lending trends good news for Maryland developers

The sharp 20 percent increase in 2016's fourth quarter commercial lending volume over the previous quarter is being seen as a positive sign for 2017. While overall figures for 2016 fell shy of surpassing the previous year's figures, commercial real estate lending remains strong, according to an assessment put forth by the Mortgage Bankers Association (MBA). This nationwide trend is also good news for Maryland developers.

The year also ended on a strong note with a high volume of multifamily and commercial borrowing. Government-sponsored lenders continued to enhance the market. Not everyone took advantage of the trends last year, though, as there were fewer loans originated by retail, hotel and health care properties. There was, however, an increase in loan requests from office property owners. The MBA's survey also noted a strong appetite among lenders to make new loans.

For commercial real estate developers in Maryland, these trends provide an added incentive to seek financing for new projects. Once a developer finds an office or industrial property that fits their needs, a lawyer with knowledge of commercial lending may be able to provide valuable guidance and assistance with securing the necessary financing for the construction and development phase and any necessary equipment and inventory purchases.

Securing a deal for a new commercial property that's favorable to all parties involved often involves preparing, reviewing and analyzing agreements and certificates and negotiating with lenders. It's the latter process that sometimes becomes complicated, especially for larger projects. An equally important part of the process is coordinating the closing of the loan and ensuring that all necessary documentation has been prepared and submitted to minimize the risk of potential financial issues occurring.

Source: CoStar, "Commercial Real Estate Lending Ended 2016 on Strong Note" Mark Heschmeyer, March 2, 2017

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