This June, SBA 504 borrowers can secure financing at a 20-year fixed rate below 4 percent for the first time in the program’s 33-year history. The 20-year effective rate for June is 3.98 percent, below the December 2012 record of 4.01 percent.
At 152 basis points under the Bank Prime Rate, the June funding is the furthest below prime that 20-year rates have been since May 2007. Market observers are predicting that the Federal Reserve will make two ¼-point interest rate cuts this year, but even with cuts, the 504 effective rate may remain approximately one full point below prime. This is the first time a 20-year 504 effective rate calculation has been this low.
Clearly, no time has ever been better for SBA 504 borrowers to lock in a fixed-rate commercial property loan. Beat the rush that will be triggered by the new low rates, and contact us today to get started. Liberty SBF can get the job done in 45 days or less.
Small businesses, banks, and investors warmly received the SBA’s 25-year loan program, launched in July 2018. In June, less than a year later, the total amount lent reached $1.04 billion, exceeding the $1 billion goal for the first year. The numbers represents 1,289 fixed-rate SBA 504 loans to U.S. small businesses.
Also: Read our article on what the 25-year term means to business owners.
Senior Housing Needed for Middle-Income Boomers
Senior housing today is unaffordable for middle-income retiree such as nurses, schoolteachers, firefighters and steel workers, and they will have too much income to qualify for Medicaid. Aging boomers also want more amenities and independence, and as-needed healthcare than earlier generations. Real estate investors, developers, owners and operators need to innovate fast. Some proposed solutions include tax incentives, repurposing existing real estate like former malls and big-box retail, designing for construction, operational efficiency and cost savings, and volunteer caregivers.
Rising Costs of Mandated Hotel PIPs
Nearly every hotel deal comes with a mandated, formal property improvement plan (PIP) that addresses every aspect of the hotel from mechanical systems and plumbing to lighting, landscaping, and parking. PIPs are increasingly costly, as branded hotels have become more aggressive in their PIP requirements. The PIP can be negotiable, especially for sellers and buyers who have existing relationships with the brand. Negotiating PIPs early on can directly increase profits for sellers and lower the costs for buyers.
US Retailers Strive to Differentiate Offline Channels
A recent study by Avison Young describes the challenges online retailers present to offline retail distributors in the US. As Amazon creates a shopping environment unrestricted by time, place, and product, some department store chains have improved offline sales by stepping up customer-friendly services. For example, Nordstrom is expanding its service-hub Nordstrom Local concept that combines several of its most popular or highly demanded services under one roof to serve customers in their own local markets.
How Can We Help You?
Liberty SBF offers quick closings for SBA 504 and conventional loans. We’d love to help you.
President Trump continues to criticize the Federal Reserve sharply for past interest rate hikes. He is demanding rate cuts in 2019. Stock market investors, rattled by threats to impose tariffs on Mexican goods, want rate cuts to bolster the equity market. Most (95 percent) Wall Street observers anticipate that the Fed will announce a quarter-point cut following its June or July meetings, according to BMO Capital Markets.
The Fed’s strategy conference last week in Chicago began to prepare the public for a round of quantitative easing in an effort to short-circuit opposition to the measure. Citing lessons learned following the 2008 crash, Fed Chairman Jerome Powell said the Fed must take measures now and purchase assets to counteract risks of a recession. Trump’s trade wars put the Fed in a tough spot as it tries to support high employment and low inflation (nytimes.com).
Rate cut or not, today’s low interest rates make this a good time to lock in a fixed rate commercial property loan. Liberty SBF can get the job done in 45 days or less.
When Liberty SBF decided to replace office chairs in its Philadelphia office, they thought that the old furniture shouldn’t go to waste.
“The old ones were still in good condition and we didn’t want to throw them away to sit in a landfill,” said Joe Breen, an intern in the company’s credit department.
Liberty SBF took the time to reach out to a few donation centers and finally settled on Habitat for Humanity Philadelphia.
“Habitat for Humanity Philadelphia was enthusiastic about taking the 15 chairs we donated,” said Liberty SBF Recruiting Director Meghan Schmidt.
The organization told Liberty SBF that after they build a house, they can furnish them with gently-used furniture, or the sell them to raise money for their building costs.
The Latest Commercial Real Estate News From Liberty SBF
10 Reasons Applying For an SBA 504 Loan is Worth It
AZBigmedia.com published a summary of the top 10 reasons to apply for an SBA 504 loan. A low down payment topped the list, allowing business owners to purchase a property they otherwise couldn’t afford. A 30-40 percent down payment isn’t attainable for most small business owners but the SBA 504 loan program finances up to 90 percent of the acquisition plus some soft costs. Long term, fixed interest rates are other reasons to go SBA 504. The full list provides a quick education on 504 financing.
Phoenix Medical Office Vacancy Falls 33%
Demand in the form of an increased population has helped the medical office market in Phoenix. A new report from JLL shows that vacancy rates have fallen by 33 percent in the past five years. But, it’s not just a population boom that is driving growth in this corner of America. Over the years, Phoenix has attracted some heavy hitters in the medical provider sector including the Mayo Clinic, Banner Health and Dignity Health, the largest hospital system in the US.
The Drumbeat to Cut Rates Gets Louder
As the trade wars continue to escalate, Federal Reserve Chairman Jerome Powell reassured the financial markets, saying the Fed will “act as appropriate to sustain” the current economic expansion. Is a rate cut appropriate to the times? Anxious about the trade war, Wall Street is expecting that the Fed will cut its benchmark rate twice before the end of the year.
Liberty Closes Over $40MM in Industrial Property Loans
Liberty SBF clients have been participating in the new economy with over $40MM in industrial property loans closed across the county. See all of Liberty SBF’s recently closed loans.
How Can We Help You?
Liberty SBF offers quick closings for SBA 504 and conventional loans. We’d love to help you.
As the trade wars continue to escalate with President Trump’s new threats to impose high tariffs on Mexico, Chairman Jerome Powell reassured the financial markets on Tuesday, saying the Fed will “act as appropriate to sustain” the current economic expansion. Is a rate cut appropriate to the times? Anxious about the trade war, Wall Street is expecting that the Fed will cut its benchmark rate twice before the end of the year (cnbc.com).
Not all observers think the Fed should act to cut interest rates. Even with inflation low and looming trade threats, Kansas City Federal Reserve President Esther George said there’s no need for a rate cut. President Trump, however, has been leaning on the Fed to cut interest rates in the context of the trade war with China, saying a rate cut would ensure a US victory: “Game over, we win!”
The rate game is not over though. We will keep watching as things unfold but for now, one thing is certain: interest rates today remain low. It’s a good time to lock in a fixed rate commercial property loan. Liberty SBF can get the job done in 45 days or less.
Front exterior of an industrial warehouse building in Queensland Australia. Click to see more…
According to JLL, flex office space is growing by an average of 33 percent each year, accounting for almost two-thirds of US occupancy gains. No markets are over-saturated, and there are plenty of opportunities for this type of asset in many US metropolitan areas. The top ten growth markets are New York City, San Francisco, Silicon Valley, Austin, Boston, Northern Virginia, Washington DC, Seattle, Denver, and Los Angeles’ Westside.
Arizonans Named SBA Small Business Persons of the Year
Jennifer and Jeff Herbert, founders of Superstition Meadery in Prescott, Arizona, were named 2019 SBA Small Business Persons of the Year. They produce mead (fermented honey with fruit, herbs, and spices), the world’s oldest known alcoholic beverage. The Herberts grew their $5.5 million, 140-employee, two-locations business with SBA financial and counseling support. An SBA 504 loan covered the costs of constructing its new distribution and franchise support center in 2017.
What You Need to Know About SBA 504
TMC Financial’s CEO Barbara Morrison spoke about SBA 504 lending to cpexecutive.com. She was asked about the three main things borrowers don’t usually know about 504 lending. One thing she said was that many business owners are unaware of the program and its 10% down payment, which she called a “game-changer” for many owners. Other business owners weren’t aware they qualify as “small” business owner. “The SBA’s definition of ‘small’ is substantially larger than what most people assume. The truth is, most for-profit businesses qualify,” she said. Morrison also said that there is a misconception about how long it takes to get SBA financing.
Liberty SBF Adds New Originator to Fast-Growing National Team
Liberty SBF is excited to announce that Carlos Vasquez, MBA has been appointed VP, Originations, a new originator on our fast-growing national team of top-ranked commercial real estate professionals. Based in Austin, Mr. Vasquez will further increase our capacity to provide high leverage fixed-rate SBA and conventional loans in Texas.
How Can We Help You?
Liberty SBF offers quick closings for SBA 504 and conventional loans. We’d love to help you.
With U.S. inflation at 1.6 percent for Q1 2019, the Federal Reserve continues to hold off on any interest rate changes following last week’s meeting of the Fed’s Open Market Committee. With both President Trump and Vice President Pence urging the Fed to cut interest rates, the central bank is working to convince observers that its goal is to see price and wage increases without the expectation of rate cuts. Fed Chairman Jerome Powell said the Fed, as a nonpolitical institution, would not be swayed by pressure from the White House.
Powell said he expects price gains to emerge eventually. U.S. employers added 263,000 jobs in April, resulting in a 3.6 percent unemployment rate. If the labor market continues to tighten, employers may raise wages to attract talent, while consumer demand may allow companies to raise prices. Both are slow to appear at this time.
Economists agree that today’s job boom and low inflation seem unlikely, as low unemployment tends to slow the rate of job creation. For now, however, it appears that the Q4 2018 fears of an economic slowdown were unfounded.
Now is the best time to lock in a fixed rate loan while interest rates are still at historic lows. We can get the job done in 45 days or less.
Strong demand for capital in the commercial real estate
sector is expected to continue for the foreseeable future. Historically low
interest rates, a robust economy, and strong employment numbers are boosting a
surge in CRE demand across the country. People
might assume that all commercial real estate lenders are alike, but there are
many types of financial institutions that work with CRE borrowers.
What is a direct lender and how is it different?
CRE loans have typically been funded by traditional lenders, such as banks, CMBS lenders, Fannie Mae, Freddie Mac, and other sources. Today, another type of financial institution has grown in popularity: the direct lender or as it is sometimes called, a non-bank lender (NBL). The implementation of financial regulations over the past few years, such as the Dodd-Frank Act and Basel III risk-capital rules, has made CRE lending less profitable for some traditional financial institutions.
As a result, many tend to focus only on larger, more substantial borrowers and the most lucrative commercial real estate projects. For many small business owners, securing financing from a traditional financial institution can prove difficult. Commercial banks have traditionally had tight credit for small business owners because they view them as risky investments.
Smaller CRE borrowers and owners are forced to look elsewhere for capital.
Direct lenders like Libery SBF have stepped in to fill the funding gap in the CRE market and provide capital to borrowers who are not as well-served by traditional funding sources.
Direct lenders are essential to the commercial real estate mortgage landscape
Why should the borrower who wants to conclude a deal in a timely manner choose a direct or non-bank lender? Because a direct lender offers significant differences from your traditional financial institutions.
Direct lenders offer some banking services, but with a chief difference: a direct lender like Liberty SBF does not take deposits from its customers or the public.
• Traditional financial institutions must follow standardized procedures for loan approvals that take time to work through.
While still adherent to standards and best practices, direct lender like Liberty SBF can offer flexibility to better suit borrowers’ needs for faster, more efficient loan approval. These lenders also offer borrowers a greater level transparency.
• Traditional
financial institutions might provide other services besides affordable loans.
They view borrowers as potential customers for deposit accounts and the full
range of business services for all financial transactions.
Liberty SBF is transactional, focusing on lending, not on promoting additional services. Borrowers are not expected to develop a more comprehensive banking relationship, and have no need for moving deposits, merchant services, credit processing, and other products. Many real estate owners prefer a more streamlined process, and to devote fewer people to dealing with a lender. A lender like Liberty SBF makes loans directly from its balance sheet, hence the term.
• Traditional
financial institutions tend to lend to projects in established, major markets
by well-known entities with long track records.
Direct lenders are more friendly to projects by smaller borrowers that fall outside of these strict parameters. Liberty SBF will work to ensure that borrowers feel comfortable and understand the loan process, and help drive the CRE deal to conclusion.
• Traditional
financial institutions, with standardized procedures for lending, are more
likely to treat every borrower business the same way.
Liberty SBF is a better lender. We can better guide borrowers through the specific requirements of the SBA 504 loan process. We review each business in the context of its industry to underwrite them appropriately.
• Borrowers value non-bank
lenders for their ability to make decisions quickly with a minimum of red tape.
Borrowers have the opportunity to talk about a loan directly with a decision-maker and get a good idea of whether or not the loan is likely to be approved without going through a lengthy process. Liberty SBF has senior executives in major markets nationwide who can meet locally with borrowers and further streamline the loan process. For all of these reasons, direct lenders like Liberty SBF are predicted to grab a bigger piece of the CRE lending market in the future, with ample investor capital available to fund non-bank loans.
How to Obtain a Direct Lender Commercial Real Estate Loan
The decline in funding from conventional commercial banks has left many small business owners in need of financing. When such a business looks for a loan, it’s a good idea to look for the best lenders, whose leaders have years of experience of economic ups and downs in the commercial real estate sector and a thorough understanding of loan procedures. Qualifying for non-bank financing is as rigorous as qualifying for traditional financing.
A commercial real estate borrower should consider the following:
• Identify the reason for seeking a loan: will it be used for a property acquisition, a refinancing, a building upgrade, or other use?
• Consider what kind of financing is appropriate for the project.
• Identify the right lender with expertise with your specific deal and who is experienced, highly responsive, and efficient to apply for a loan.
Loan seekers and their brokers will have the best chance of success when they carefully present their project to the right lender. If they have done their homework and identified the best funding source, a single presentation may be all that’s needed.
Is an SBA 504 Loan Right for Your Business?
SBA loans are
like traditional term loans with greater benefits and they’re partly guaranteed
by the US government. An SBA 504 loan minimizes risk for commercial
lenders, and gives creditworthy business owners (with sufficient liquidity and
net worth to be acceptable to the lender) access to better financing than they
would otherwise qualify for in a conventional loan.
You can find Liberty SBF’s requirements for SBA 504 loans here.
The experts at Liberty SBF specialize in helping guide borrowers though the loan
process efficiently to ensure their successful SBA 504 loan closing. Now
is the time to lock in a fixed-rate commercial property loan while
interest rates are still low. Contact Liberty SBF, and we
can get the job done in 45 days or less.
A commercial landscaping company in the Inland Empire, CA recently refinanced an SBA 504 loan with a very competitive fixed-rate Conventional loan from Liberty SBF.
The owners used the proceeds to pay off an existing lien on an industrial property and took cash out for working capital to pay down short-term debt and purchase new vehicles and equipment.
How can we help?
Liberty SBF offers personal service for SBA 504, bridge and conventional loans. We’d love to help you.
Will we see an interest rate cut in the near future? The White House is calling on the Federal Reserve to cut interest rates immediately. Rates today are just below 2.5 percent, and President Trump and his economic adviser Larry Kudlow want to see rates at about 2 percent. Investors seem to agree, as Wall Street is already pricing in a rate cut for later this year. Most independent observers in the US are forecasting slowing economic growth.
At the same time, reports CNBC, Fed Chairman Jerome Powell’s dovish March 20 announcement of no change in interest rates set off a week of upheaval in global bond markets, with yields spiraling lower. Expectations of lower interest rates are fueling concerns about a weaker global economy, intensified by fears of what may happen in Europe and uncertainty about a US-China trade deal.
But, leaders in the commercial real estate industry have already said they are anticipating a rise in interest rates, according to Seyfarth Shaw’s 2019 Real Estate Market Sentiment Survey. Amid concerns that the current growth cycle will come to an end, ninety-one percent of respondents said they expect at least one interest rate hike this year, with 6 percent projecting as many as three. The real estate industry sees Fed policy and political and stock market volatility as indications that higher interest rates are on their way.
The one thing we know for sure is that interest rates won’t stay low forever. With a variable rate mortgage tied to the prime rate, monthly payments will rise as rates go up. Business owners with commercial property debt tied to an adjustable rate should protect themselves and their clients by refinancing with a fixed-interest SBA 504 loan. To refinance a government loan (ineligible for the SBA 504), a fixed-rate Liberty SBF conventional loan will do the trick.
Now is the best time to lock in a fixed rate loan while interest rates are still at historic lows. We can get the job done in 45 days or less. Contact us today to get started.
The US hotel industry saw another record year in 2018, reaching absolute values that were the highest ever benchmarked. A 10th consecutive year of growth is predicted for 2019, according to CBRE Hotels Americas Research.
Borrowers who seek to acquire or refinance hotel properties are finding that some lenders today are cautious on hotel deals, as many see the sector at a peak.
There are still good deals out there. As experienced lenders, we are convinced that the best, most cost-effective solution is to finance your hotel is with an SBA 504 loan. In this article, we will walk you through today’s peak hotel market, as well as recent changes that affect SBA 504 loans.
The thriving hotel market
The demand for hotel accommodations continues its nine-year rise in line with the continuing strength of the US economy, with hotel occupancy seeing a 0.5 percent year-over-year increase to 66.2 percent in 2018, the fifth straight record level for the industry. The average daily rate (ADR) rose 2.4 percent to $129.83, and revenue per available room (RevPAR) increased 2.9 percent to $85.96. Group and corporate travel stays will be a consistent source of demand growth for hotel rooms in the U.S., according to STR. Additionally, weekday demand is very strong, indicating that corporate/ business guests are traveling more frequently.
CBRE even predicts that overall hotel returns over the next three years will be the highest of any commercial real-estate sector. According to CBRE’s R. Mark Woodworth, “The magnitude of profit growth may not be spectacular, but the probability for revenue growth is solid, and operating margins remain well above historical levels.” Growth will be slower for sure. STR & Tourism Economics forecasts demand growth year¬-over-¬year at 1.9 percent, compared to prior projections of 2 percent.
What does this mean for loan seekers?
Hotels have emerged as one of the commercial real estate sectors where owners can still make the returns compute. Bank financing on commercial real estate isn’t as readily available today as it was over the past few years, however, and owners may face challenges in finding affordable financing. Timing can make the difference between winning and losing for owners seeking to lock in a relatively low long-term interest rate on an asset. We believe the proven solution is to borrow from an experienced hotel lender with expertise in SBA 504 loans. Capital is there for reaching short- and long-term financing goals if you know where to find it.
SBA 504 loans and hotels
Hotel owners will find the SBA 504 loan has advantages that no other can equal. For facilities that are older than two years, borrowers can take advantage of all the many benefits that come with the SBA 504 program: 85 percent LTV (loan-to-value ratio) financing, a low fixed rate, and up to 25-year terms. The SBA guarantees a portion of the loan assuming the risk of default, allowing for a much higher LTV than any conventional commercial property mortgage alone. SBA 504 loans can be used solely to acquire existing hotels, acquire and renovate a hotel, and refinance an existing loan.
The SBA classifies some properties as “special purpose” properties. It defines a special purpose property as “a property that is appropriate for one use or limited use: a building that cannot be converted to another use without a large capital investment,” and requires a 15 percent down payment on 504 loans.
Also, borrowers cannot use the SBA 504 program to refinance an existing SBA or other government loan.
Close-up of an SBA 504 loan
Let’s demystify the nature of an SBA 504 loan. Imagine a borrower is seeking SBA 504 financing for acquiring a Best Western hotel for $4.2 million, including the PIP. Where will the funds come from? How much money does the borrower need to come up with out-of-pocket for the down payment?
We can calculate the financing structure of an SBA 504 loan simply as: 50 percent + 35 percent + 15 percent = 100 percent. That formula breaks down as follows:
• 50 percent: The first 50 percent takes the form of a conventional loan from a financial institution like a bank or specialty SBA lender. The first-lien loan is usually a fixed-rate loan amortized over 25 to 30 years. In our example, this means that the first-lien lender will commit $2.1 million toward the total financing of the deal.
• 35 percent: The next 35 percent of financing is a 20-year second-lien fixed-rate loan from an organization known as a Certified Development Company (CDC). A CDC is an SBA-regulated, nonprofit organization with a mission to promote community economic development through the SBA 504 loan program. Each of the more than 260 CDCs nationwide covers a specific geographic area of operations, usually the state in which the CDC is incorporated. The SBA assumes the risk on the CDC’s second-lien loan through its guarantee. If the borrower defaults, the SBA will pay off the loan. Our hypothetical hotel buyer will secure a second-lien loan in the amount of $1.47 million from the CDC, guaranteed by the SBA.
• 15 percent: The final 15 percent is the down payment from the borrower. Most conventional loans require a 25 percent minimum down payment, so the borrower realizes significant cost savings with an SBA 504 loan. For our imagined borrower, the down payment will be $630,000.
• When a borrower is acquiring a branded hotel, the franchise typically requires a property improvement plan (PIP) that will bring a hotel into compliance with the brand’s latest standards, from design to energy efficiency. The SBA 504 loan will finance up to 85 percent of the acquisition cost plus PIP.
Recent changes in SBA 504 regulations
The past few years have seen the SBA increase its scrutiny of borrowers’ qualifications for the 504 program. While it used to overlook borrowers who were minority (less that 20 percent) stake partners, the SBA is now looking closely at them and the type of hotel ownership they hold. Formerly, when minority owners had too much SBA debt to qualify, they could hold a five percent stake, while the majority owners were said to be running the business. Today, they are no longer tucked away from SBA scrutiny—every borrower on a deal must have no more than $5 million in total outstanding SBA debt. A good SBA 504 lender with hotel experience will understand this requirement, and help you structure your deal to help avert any future problems with your partner borrowers down the road.
A fairly new SBA requirement is for borrowers to submit a feasibility study to ensure that market conditions support the potential future success of the hotel investment. The feasibility study is a report by a qualified third party that examines the local market, demographics, and other factors that are expected to affect the hotel property’s performance, such as an already overbuilt market.
After reviewing an SBA 504 loan package, an experienced SBA lender will ask the right questions, anticipate problems, and help the borrower overcome any potential roadblocks. This is why it’s so important to find the right lender. The experts at Liberty SBF have an extensive network of finance industry contacts. We specialize in helping guide both borrower and CDC though the loan process efficiently to ensure their successful SBA 504 loan.
Smart financing
The hospitality industry may be at a peak, as some predict, but Liberty SBF also believes there are still good assets to be found and when a borrower has identified one we are here to help them secure the deal with a low, fixed rate.
As a global economic downturn begins to take shape, late-cycle commercial real estate investors are focusing on industrial and multifamily as the asset classes that will best weather any coming storms—unlike the office and retail boom that preceded the 2008 crash. The Federal Reserve’s stricter controls on construction loans have effectively prevented overdevelopment, say industry observers, giving rise to predictions that the approaching downturn will be relatively gentle.
Self-Storage Spotlight
Don’t miss the just-published Self-Storage Spotlight, a comprehensive report by Liberty SBF market analysts that surveys every aspect of the “recession-proof” self-storage market and its current, extended growth cycle.
E-Commerce Packages Overflowing Lockers
E-commerce is growing by 20% every year. Multifamily owners have installed digital storage lockers to help handle the heaps of e-commerce packages that don’t make it to tenant doorsteps. Space is limited, lockers are fast becoming overloaded, and adding more lockers is costly and non-scalable as volume increases. One solution is Fetch, a smart new offsite service company that offers multifamily operators unlimited storage for everything from meal kits to mattresses, and allows tenants to schedule deliveries at their convenience.
Liberty SBF Provides $1.6M for Warehouse Acquisition
Liberty SBF successfully closed a $1.6 million SBA 504 loan, in partnership with Florida Business Development Corporation, for an appliance supply company’s acquisition of a warehouse property near Orlando, FL. Despite a delay due to last month’s government shutdown, the transaction closed within a very tight timeframe. Liberty SBF provided 90% LTV financing with both a first and interim second lien loan, allowing the business owner to preserve cash for working capital.
An Overview of the Self-Storage Market
For a quick, clear overview of the robust national self-storage industry, see the market-by-market slideshow by nreionline.com that ranks 36 US MSAs by population and employment growth statistics, vacancy rates, and completed facilities. The #1 growth market? Las Vegas.
How Can We Help You?
Liberty SBF offers quick closings for SBA 504 and conventional loans. We’d love to help you.
A dent-and-scratch appliance supply company near Orlando, Florida recently acquired a 34K square foot warehouse with a $1.6MM SBA 504 loan from Liberty SBF. The deal closed within a very tight timeframe even allowing for a delay due to the government shutdown.
Liberty SBF provided 90% LTV financing with both a first and interim second lien loan allowing the business owner to preserve cash for working capital. Florida Business Development Corporation partnered with Liberty SBF on the deal and will provide the government guaranteed second lien loan when the debenture funds. By purchasing this property, the business owner is saving money on monthly, rent improving cash flow.
How can we help?
Liberty SBF offers personal service for SBA 504, bridge and conventional loans. We’d love to help you.
Feds Update Congress, Economists Await Jobs Report
Last week the Federal Reserve reported to Congress that the U.S. economy had maintained “solid growth” in the second half of 2018. In its monetary policy report the Feds gave a mostly sunny outlook for the economy balanced against what Reuters called “emerging domestic and global risks.” Economists are looking forward to this week’s jobs report. Last month the report showed better than expected results and that the job market continued to be a bright spot. Among the industries that led job gains last month were leisure and hospitality, construction, and health care.
Available Healthcare Space With Tighten Further in 2019
In an article about medical properties in Houston, GlobeSt.com talked about the tightening of healthcare space in some markets. The cause us that the number of people who are 65 and over is growing at a much faster rate than the population of people under 64-years-old. Demand for healthcare space in the US could top 225.8 million square feet by the end of 2019. In comparison, it is estimated that there was “110 million square feet of available medical office space in existing and under-construction buildings in the US as of the second quarter of 2018.”
$12.9M Healthcare Facility Closes with Liberty SBA 504 Loan
A skilled nursing home in Tucson, AZ, recently closed with the help of $12.9 million in financing from Liberty SBF. Liberty provided both the $8 million SBA 504 first loan and a $4.9 million interim loan to allow the transaction to proceed while the CDC portion of SBA 504 loan is being completed. Sapphire of Tucson Nursing & Rehab is the area’s only privately-owned skilled nursing facility.
Florida Shines as State Where Most Seniors Want to Retire
Assisted Living and Skilled Nursing Facility owners take note: It’s true, older Americans really do prefer to retire to Florida. In it’s Fun Statistics About Seniors section SeniorLiving.org says that in according to the U.S. Census, the state had the highest percentage of senior residents (19%). Which state had the lowest? Alaska at 9.5%. Probably most obvious were the top reasons seniors gave for preferring the Sunshine State: warm weather and no state taxes.
The Enormous Opportunity for Owner-Occupied Healthcare Facilities
It’s no secret that healthcare in the United States is big business. In 2017, Americans spent nearly $3.5 trillion on their healthcare, and the U.S. Centers for Medicare and Medicaid Services is estimating a 5.3% increase this year. By 2026, that spending is projected to reach $5.7 trillion.
That growth has a whole range of implications, but today we’re going to narrow in on what it means for the real estate market – more specifically, the market for owner-occupied healthcare facilities, and the ways that they can be a perfect fit for SBA 504 financing. Read more.
How Can We Help You?
Liberty SBF offers quick closings for SBA 504 and conventional loans. We’d love to help you.
