Commercial mortgages are loans obtained for acquiring or developing commercial properties. 2017 has seen some significant changes in the many segments including multifamily, retail, industrial and office space.
Commercial mortgage brokers, lenders, borrowers and investors are paying close attention to the varying sectors of commercial real estate. With the increase in building and investments that 2016 saw, those in the industry are wondering when the peak will hit and supply will out-number demand. This is particularly true in the multifamily sector. Apartment complexes have been a hot ticket from both lender’s and developer’s perspective. In fact, the U.S. is expected to see more than 345,000 new apartments across the nation—a number that has not been surpassed in 20 years. Particularly strong markets have included Atlanta, Austin and Charlotte. One of the hottest—Dallas—has 25,000 new apartments in the works for 2017, up 61 percent from 2016. Lenders and borrowers are wondering when Dallas will succumb to too much supply and the massive new construction will lead to decreased rents as seen in the bigger cities of Boston, New York City and San Francisco.
Commercial mortgage brokers and lenders have shied away from retail for sometime due to the changing trends, diminishing sales at brick and mortar locations, and online mania. One interesting development is that while suburban retail markets are finding it difficult to compete and coexist with the vast number of brick and mortar locations, urban areas are needing to expand to meet the increased demand that newer generations are placing on them. These young adults appreciate convenience and the ability to walk to neighborhood shops and eateries, making urban living their present primary choice for housing.
The industrial segment is seeing a strong drive in distribution centers as online businesses continue to thrive. These are popping up in areas with space that are close to larger cities. The newer generations are not only affecting the housing arena, they are changing the structure of office space as well. Their need for collaboration, desire to lead a balanced life and to work for companies that want their employees and the community at large to thrive have significantly impacted this sector. Green buildings are a big trend as well as multi-use developments that offer shopping, restaurants, commercial and residential spaces.
Because of the rapid growth in several sectors, the continuing and lengthy economic recovery, as well as the uncertainty in the present administrations ability to carry out promised tax and regulatory reform, banks are increasing their underwriting standards and becoming more cautious. This has led to not only less approvals, but lower commercial mortgage amounts as well.
Alternative lenders are stepping in to fill the gap.
Private hard money lenders are one of the alternatives that developers and contractors are turning to. These asset-based loans offer fast approval and time to funding, getting them the capital they need when a promising property hits the market. At Level 4 Funding, we work with hundreds of private investors who often specialize in one of the sectors of commercial real estate development. Our rolodex may just have the investor you’ve been looking for.
Level 4 Funding LLC Private Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.