Yeah, the commercial rental market has rebounded a bit, but there is still a lot more space available than businesses who are looking to rent. To top that off, commercial owners often have clauses built in to the mortgages now that won’t allow them to rent the commercial space for less than a certain amount per square foot. Of course this is an extremely bad idea, because then the owner can’t respond to the market efficiently and losses are inevitable, but the banks are doing it anyway for some unfathomable reason.
I’m not an expert (but hubby is). Haven’t asked him, but will tonight.
Thinking it has something to do with:
a. the borrower having enough NOI to ensure service of the debt
b. LTV