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What if they can't find a tenant. I do not imagine all commercial property is financed with leverage. There will be properties that have paid off their debts. L
by terminalcommand 3y ago
What if they can't find a tenant. I do not imagine all commercial property is financed with leverage. There will be properties that have paid off their debts. Loan will be recalled if they cannot find a tenant.
- nradov 3y agoOutside of small properties owned by individual investors or syndicates, pretty much all commercial property is financed with leverage. Often there is a separate holding corporation established for each property. Depending on the covenants, the lender may not be able to immediately call the loan in but refinancing is going to be a problem when the term is up.
- terminalcommand 3y agoThis may be a trivial question but do they continuously refinance with leverage? Let's say that the property was built 20 years ago, has been operating since then, will there be any mortgage left on it?
- nradov 3y agoYes, the usual practice is to refinance periodically. It's common for those loans to be for 10 years, but terms vary.