Almost 10 years ago, the record for commercial mortgage originations was set at $508 Billion.
A good chunk of these commercial loans were set up with a 10 year maturity date which is quickly approaching. Some of these notes have a balloon term where now the unpaid balance is now due in full. Other loan types may see adjustable rate options kick in. Interest only payments could also now include principal payments.
10 years ago, one year before the Great Recession hit, guidelines basically for all mortgage types were much looser, even irresponsible with certain product types.
The relaxed nature of approving loans 10 years ago could translate to a significant headache for many commercial property owners today, especially if they got an approval they really shouldn't have gotten and if their situation hasn't improved.
As 2017 approaches, speaking with a commercial loan officer, a lender or the current note holder about what options may be available today would be a very smart idea. Even if the current note doesn't mature for another 6 months, at least see what the outlook is for a refinance or an extension of current terms. This would also be a good time to see if there are any issues with how an application might look today or if the subject property may have any issues that need to be addressed before formally applying for a new loan.
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