Finance for Commercial Properties 2023
Where We Are
Moving further into 2023 and emerging from the pandemic, business owners are realizing that the worldwide health crisis aggressively crushed some markets and product types while bolstering others. Shocking shifts have happened in how we use goods, how and where we make a living, and where we want to live. Such changes, in turn, have affected the desirability of commercial real estate investments around the country.
Strongest Markets
The Sun Belt states have become the strongest markets as people have moved there in droves. Hospitality is having a hard time in northern states with many properties currently in distress and going into foreclosure, however Florida hotels are doing quite well. Office markets are facing a great unknown due to the “remote work” phenomenon. Many companies are trying to lure workers back into office buildings while others are telling their workers to stay home indefinitely.
Retail & Industrial Real Estate
Retail suffered and the industrial sector thrived as mask mandates were implemented and online shopping experienced an explosion. Multifamily housing has made a huge comeback, with Zillow estimating an astonishing 15.2% rent-growth figure from November 2020 to November 2021. CBRE reported that a record $335.3 billion was invested in multifamily properties in 2021.
Manufactured Housing & Mobile Homes
The manufactured-housing sector also is undergoing major growth, according to research from Green Street Advisors. The company’s commercial property price index, which describes the prices at which commercial real estate transactions are being negotiated and contracted, demonstrates that manufactured housing has performed better than any other real estate asset class over the past seven years. Mobile-home parks and manufactured-housing communities — which have distinct regulatory definitions — were working well for commercial real estate investors before the COVID-19 pandemic, and this has not changed.
Non-Bank Commercial Loans Can Help Borrowers Secure Finance
We’ve highlighted a few types of borrowers/applicants that may be a good fit for a non-bank solution.
- Self-Employed Borrowers
Self-employed professionals file their taxes differently and do not have access to W2’s and paystubs to establish income viability. In these cases, borrowers can use their bank statements to show worthiness.
- Borrowers who struggle to show consistent growth through tax returns
If a borrower has had circumstances that have impacted their credit, then a non-bank commercial property loan may be in order. Bankruptcies, poor credit, and inconsistent growth on business tax returns make it difficult for certain borrowers to purchase or refinance their properties via traditional banks.
- Borrowers who need more flexibility than a bank is willing to provide
Full documentation is not an obstacle to every borrower. Banks are not the fastest moving fish in the pond and a borrower may need the speed of a non-bank lender. Additionally, banks may not be interested in giving the amount of cash out that the borrower may need in order to take advantage of opportunities. A non-bank lender like Silver Hill offers unlimited cash out.
What's Next?
If you would like to know more about this type of lending and have a transaction that you would like considered, you should complete the short form and let the lender explain your specific options.
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