How to Lower Cost of Capital for Commercial Real Estate

  • February 10, 2021

Ensuring the success of an ambitious commercial real estate project takes financial discipline and a clear vision of the future. Companies that embark upon a commercial real estate endeavor without adequate financial planning will soon find themselves in a perilous situation, yet managing the cost of capital is far easier said than done. Mastering how to lower the cost of capital is thus an essential part of long-term success in today’s crowded real estate market.

By reviewing some tried-and-tested methods for managing and lowering the cost of capital for a commercial real estate project, you can set your enterprise down the road of success while avoiding costly financial mistakes.

How to Lower Cost of Capital or Commercial Real Estate

Establish a Relationship With a CUSO

The first method that you should rely upon when trying to lower the cost of capital is establishing an enduring relationship with a good credit union service organization (CUSO). A CUSO can allow your business to secure a hefty loan at a competitive rate, thus lowering the overall financial strain your company takes on when embarking on this commercial real estate project. According to a Credit Union Times report, a CUSO has the distinct advantage of offering preferred loan terms with no prepayment penalties compared to alternative options.

When trying to manage the cost of capital, a successful company must strive to lower transaction fees whenever possible. Borrowers who work with organizations like Extensia Financial will thus be able to secure the funding they need for a project without overextending themselves or suffering from burdensome fees and interest rates.

Re-Negotiate Early Lease Renewal

The next method that can be relied upon to lower cost of capital associated with a commercial real estate project is to re-negotiate an early lease renewal. Re-negotiating an early lease renewal will allow you to reap long-term savings.

Re-negotiating early may enable your organization to secure new, more affordable rental rates. Alternatively, it may help you alter the overall square footage your company utilizes in your CRE project. As a result, your company can yield long-term financial benefits by lowering such things as energy use in your buildings. Lowering the operating costs of your project by investing in efficient energy strategies is never to be overlooked.

Expand your CRE Project With Extensia Financial

When in need of appropriate loan management for your CRE project, consider partnering with Extensia Financial. CUSOs such as Extensia Financial provide unparalleled experience and expertise to credit unions when it comes to proper loan management. Both individual loans and entire portfolios can be managed on behalf of clients who seek to lower cost of capital.

Extensia Financial’s team takes great care when assessing the unique character of each commercial real estate project. Then, Extensia Financial’s team crafts a unique financing solution that best meets the needs of your project.
With the help of a prominent CUSO like Extensia Financial, your organization can quickly lower the cost of capital for its commercial real estate project without sacrificing valuable time or profitability.