KCRag Forum

It’s not good business for banks to tell clients they’re not interested in making more commercial property loans because of problems in their existing portfolios. Instead, they just ramp up the qualification criteria and tell most people no deal.

That tends to leave business owners and investors headed out the door wondering what just happened. A big reason is that Kansas City-area banks recorded a 363% spike in troubled commercial property loans in the third quarter compared with the previous year.
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“You’re already seeing that happen a lot in California, where assets are selling at 40 cents on the dollar,” he said. “We’re talking about buildings that were valued at $100 million selling for $40 million almost every day right now. Some of those buildings might be relatively vacant, but for somebody with the means to do it, there is a huge opportunity to buy something at a deep, deep, distressed discount.”