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Lenders Are Growing More Conservative About Retail

Lenders are beginning to lower the maximum LTV and increase DSCR, keeping rental-rates flat and allowing landlords to reserve for tenant improvements in case a property needs to be repositioned during the term of the loan, Money360's Gary Bechtel tells GlobeSt.com.

By Carrie Rossenfeld | carrierossenfeld | Updated on October 20, 2017

Gary Bechtel Bechtel: “Centers with marginal tenant bases, especially those located in secondary or tertiary markets, will most likely be financed on a more conservative basis and/or by the emerging group of non-bank lenders.”

LADERA RANCH, CA—Lenders are beginning to lower the maximum loan-to-value and increase debt-service-coverage ratios, keeping rental-rates flat and allowing landlords to reserve for tenant improvements in case a property needs to be repositioned during the term of the loan, Money360‘s president Gary Bechtel tells GlobeSt.com. The technology-enabled direct lender specializing in commercial real estate loans closed more than $100 million in loans in Q3, bringing the company’s total loan closings to over $450 million, with a target of $600 million in transactions by year-end.

We spoke with Bechtel about the lending market for retail in particular, which is undergoing a reinvention.

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