The commercial mortgage market is going through some dramatic changes in Canada. The industry is moving towards securitization as an alternative to the traditional balance sheet lending of the big banks and insurance companies. Foreign players are aggressively entering the Canadian market and providing financing for non prime “B” and “C” Borrowers.
With the addition of these new players, and the move towards increased securitization, the Canadian commercial mortgage market is set to grow.
Securitization is leading to a greater availability of funds and greater flexibility in the types of properties that can be mortgaged. In the past decade the banks and insurance companies have shied away from all but the best of properties and borrowers. The banks are slowly starting to become more aggressive and the new entrants to the industry are picking up the slack. This bodes well for potential borrowers.
Typically, the larger players will only begin to look at commercial mortgages in excess of $2 million. There is a shortage of funds available for smaller commercial mortgages but this is changing with the addition of the new entrants.
Right now there is an abundance of funds available for residential apartment complexes and a growing availability of funds for the smaller store + apartment properties. Small industrial condos and single use facilities still face difficulty obtaining financing from traditional sources.
The pricing of commercial mortgage rates and fees is as varied as the players in the industry. Each property and borrower is unique. It is impossible to quote rates and fees without a thorough understanding of the property and covenant involved in the transaction.
If you are in need of a commercial mortgage we would be happy to discuss your options with you.