Regional Mall Loans by Tom Markel
One of the areas that have been hardest hit by this recession is shopping malls. Many of them have been forced to closed, reduced rent or bring in an added attraction like a mini-theme park just to make ends meet. For entrepreneurs this may be the best opportunity to acquire a very attractive piece of real estate for below-value cost. Regional mall loans can prove difficult to convince lenders to offer, as they are seen as very high-risk investments. Here are a few things that you will find helpful knowing before you approach anyone about investing in project.
As commercial banks start coming back in the black, lending for regional mall loans is starting to rebound and now is a good time as any to enter the regional mall business. One of the reasons is that many lending institutions have found ways to categorize traditional loans for the rather fragile real estate market into three groups: those that they plan to refinance so that the borrower can repay more easily, those that they consider a bad debt and plan to foreclose on and those that they plan to put into receivership.
Regional malls that have been put into receivership were those where the loans were borrowed from small, local and/or regional banks. This means that many of the malls are small and designed like a strip center. Having a mall on their books can be like a millstone around their necks and they would not mind getting rid of it with a reasonable proposal.
It's important to remember that many of these properties are seriously distressed and may have some grave problems on site. This means, they could still be under construction, need maintenance or require some heavy marketing to attract tenants and customers.
Most lenders will require a significant down payment toward the cost of the project and this means that you will be bearing a greater than normal risk burden. This is one of the reasons regional mall loans are still viewed with much doubt by investors who are tempted by the seemingly great opportunity that purchasing a regional mall might provide.
These are some of the things that you must consider before venturing in the real estate market. Getting a regional mall loan is one that can reap incredible rewards, but it's certainly not for the faint-hearted. It is imperative that you do your homework on the property before you attempt to get a loan to open your own shopping mall.
It is very important for a business owner to know what type of loan is best-suited to meet his or her business's specific needs. The Loan Center at iBank.com has many types of loans for different types of businesses. It has secured and unsecured loans for any amount of credit. Whatever resources a business has, whatever stage it may be in, whatever needs it may have, iBank.com will find a loan and a lender that can help them.