Commercial Real Estate Pro Network

BIGGEST RISK with DJ McClure

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Synopsis

J Darrin Gross: I'd like to ask you, DJ McClure. What is the BIGGEST RISK?   DJ McClure: I think right now, one of the BIGGEST RISK that I see among many is the number of properties that are, you know, approaching a debt restructure, you know, there's a lot of short term bridge that for a lot of properties that's coming due. And so one or two things are going to happen, obviously, they're going to be able to, if they're able to put together the funds to structure a refinance, you know, it's likely going to be into a different loan structure or excuse me a loan program, predominantly, your Fannie and Freddie type programs being, you know, the more fixed set options in a lot of cases. And this has a dramatic increase on the flood insurance coverage requirements. And so you could take a property that's only paying maybe a few 1000, a building, and the new requirements, you know, could add and more than double or triple the cost of what they're having to pay per building. And this isn't always something that some