210-260 Certification dumps 200-310 pdf 70-697 exam 210-065 exam dumps 98-365 exam 300-101 dumps 400-101 exam 100-105 test 210-260 Braindumps 200-125 exam dumps AWS-SYSOPS pdf 300-075 Practice 300-320 -100% free 300-075 exam guides

Call (516) 327-5400 info@cltitle.com
Blog
Apr 13

Real Estate Insights: Valuations Can Make Refinancing Tricky

Every other week, we’ll highlight a deal to show you what title insurance costs, as well as what happens behind the scenes to streamline the closing process.

With retail struggling across the country, including Manhattan, lenders face new challenges. Between the boarded-up windows, vacant storefronts, and declining rents, is it possible to get financing on retail condo units? How are lenders calculating valuations and underwriting loans in this asset class? Our friends at Dime have been active in this space; this recent refinancing of a retail commercial condo unit is a prime example.

The Deal

Refinance of a retail commercial condo unit for $3,570,000 out of a $3,350,000 loan:

New York County

Loan Policy $7,911
Title Fees: $1,000+
Mortgage Tax: $6,047.50
County Recording Fees: $500+
Title Grade: A-

Cornerstone Insight

This borrower was really on top of their game. The only hiccup was that we needed a letter from management indicating that common charges were current. Normally, this is a simple task, but management had recently been replaced. Getting the right contact at the old management company took longer than expected.

The larger issue, which affects many properties, is that it’s really difficult to put a valuation on a commercial property right now. Since valuations are typically based on rent rolls and tenant credibility, the ability to get financing is much more difficult. Many lenders don’t find the asset class as attractive without a steady flow of potential clientele at retail locations. And not only have valuations dropped, but the amount of leverage that lenders will allow is falling as well.

From a title perspective, this opens up owners of retail properties to liens and judgments filed by those they cannot pay.

If you have any questions about surveys or title insurance, or if you would like to discuss an upcoming or potential transaction, please contact us.