Many commercial real estate developers and operators devote disproportionate attention to loan points and origination fees while overlooking the larger economic reality of how development capital is deployed. Discussions frequently focus on whether a lender charges a point or two, as though the borrower will necessarily write a substantial check at closing.
That focus can lead borrowers to overstate the importance of a visible fee while understating the value of certainty, speed and reliable execution. In development finance, the practical question is not whether points exist, but whether the financing structure helps the project close, build, stabilize and ultimately create value.
In most commercial real estate finance transactions, the b...
