Federal regulators say they’re concerned about a continued heavy risk in large loans made by banks and other financial institutions, with the amount of risky loans remaining at double the levels before the financial crisis.
Fresno, CA -- (SBWIRE) -- 11/10/2014 -- The Federal Reserve and other agencies say that a large portion of the risk comes from loans made to investment firms for financing takeovers of companies. Those loans, called leveraged loans, accounted for 22.6 percent of large loans outstanding and 74.7 percent of the loans deemed risky by the regulators, according to the agencies’ latest annual review.
The review found ‘serious deficiencies’ in credit standards for making leveraged loans and in managing their risk.
Overall, the review found that $340.8 billion, or 10.1 percent, of big loans outstanding were deemed risky — enough for the examiners to criticize them in writing to the lenders.
That’s about double the levels preceding the crisis that struck in 2008.
Regulators are worried about a heavy load of risky loans weighing on institutions’ financial soundness and the potential threat to the broader banking system.
The lease rates also are slightly higher than office rents, although with some caveats. The C&W/NorthMarq Compass Report placed medical office rates in the region at $18 to the low $20s per square foot compared with $16 to $20 for Class A commercial space.
Still, the construction costs of medical office projects are higher. Commercial spaces have open floor plans, while medical offices have many rooms and expensive heating, plumbing, cooling and electrical equipment, said Effler. Tenant improvement allowances are substantially more than a traditional office, he said, and the health care providers might pay only 25 percent to 50 percent of that cost in cash or financing.
That leaves the developer with the weight of tenant improvements that must be recaptured in higher lease rates, Effler said. So a medical office deal that might require $50 per square foot in tenant improvements results in a landlord paying half or more, he noted.
“I would not say medical office is more favorable because you can get higher rents than other spaces,” he said. “Construction costs are higher.”
About Medical Office Loans
Biz4Loans is a California-based company with an exciting new way of quickly closing commercial loans for businesses small and large. With a customer-centric focus and a high standard for quality service, we embrace new technology to pass cost savings on to our business clients. Entrepreneurship Advocates “Entrepreneurship is living a few years of your life like most people won’t, so that you can spend the rest of your life like most people can’t. “ – Anonymous We believe entrepreneurship to be one of the most rewarding journeys that a person can pursue and that no two entrepreneurs are the same. Some seek a better life for themselves and their families while others take on the risk in pursuit of independence. Whether it is a small town where everyone knows each other or a big city that never sleeps, every community relies on entrepreneurs to create and provide jobs and to usher in new possibilities. At Biz4Loans, we understand the challenges that entreprenuers face in financing their venture. We also understand that a startup entrepreneur frequently has to wear many different hats while her company is getting off the ground. This is why we provide a quick, convenient, and detail-oriented process that achieves results without unnecessary delays or obstacles. Growing the Business Community commercial loan brokers Whether it is financing to cover initial start up costs, purchasing of new equipment for an existing business or an expansion of facilities, Biz4Loans can help. We know that sometimes unexpected costs as well as unexpected opportunities require quick and decisive action. Our ability to quickly close a wide variety of loans has allowed us to build strong relationships based on our reputation for serving our clients effectively. Because of our speed and adaptability, Biz4Loans has brokered over $500 million in funding to businesses ranging from farms, hotels, and non-profits to office buildings, surgical centers and apartment complexes.
CALL BIZ4LOANS TODAY FOR A FREE CONSULTATION http://www.biz4loans.com/