News Roundup: Industrial Still a Major Player, a Sunny Southern Outlook, 2018 Looks to Close Strong

 

A Strong Close to a Strong Year

Businessman sitting back with legs on large piggy bank

2018 has been a strong year for investment activity and commercial real estate performance, thanks in no small part to activity in the industrial market. According to Globe Street, industrial will continue to add value for owners and investors through the end of the year and into 2019.


Liberty Closes SBA 504 Loan for the Acquisition of a NJ Industrial Property

New Jersey warehouse

Liberty provided $1.12M in SBA 504 financing for the acquisition of a warehouse in the red-hot New Jersey industrial market.  See all of our closed deals.


Experts Say Strong Industrial Investment to Continue

Q2 CRE investments are up significantly

Nearly 92% of respondents in the annual Investor Sentiment Report from RCM-SIOR saw plenty more growth potential in the industrial investment sector. Respondents cited record and diversified demand, low vacancy, and the expanding economy as key drivers of growth.


A Sunny Southern Outlook

Dallas skyline

According to PwC and the Urban Land Institute (ULI), seven of the top 10 investment markets are in the South. Dallas / Fort Worth tops the list, which was released at the ULI Fall Meeting. Brooklyn is second, followed by Raleigh-Durham, Orlando, Nashville, Austin, Boston, Denver, Charlotte and Tampa. Growth in the education, health care and technology sectors are the primary drivers of commercial real estate in these markets.


Liberty Provides Over $16.7 Million in Financing to Projects in the South

Greensboro multifamily unit

Liberty has provided more than $16.7 million in financing for various projects in southern cities, including: Panama City, FL; Greensboro, NC; Memphis, TN; Atlanta, GA, Norcross, GA; and St. Simons Island, GA.


Playing the Field

Businessman standing on a cliff looking into horizon for opportunities

While industrial and distribution properties have the best investment prospects for 2019 – similar to last year’s prognosis – the 2019 Emerging Trends in Real Estate from PwC and ULI notes that investors are increasingly looking for new opportunities in property types that they have not tried before.


How Can We Help You?

Liberty SBF is the #1 ranked non-bank SBA 504 lender by volume in the country. We offer personal service for SBA 504, bridge and conventional loans. We’d love to help you.

Let’s Talk. 

News Roundup: Self-Storage Rides a High, Rate Hikes Haven’t Ruined Things and the Dawning of the Age of the Cheap Chic Hotel

 

Self-Storage Is Up 120%+, Still a Good Bet

interior of self storage hallway with blue doors

Let’s face it, we’re addicted to stuff. And self-storage facilities are there to help. That’s why self-storage sector REITs are up 120.6% in the last eight years. While self-storage rental rates may no longer be growing by double digits, many professionals see plenty of positives in the sector’s future.


Liberty Finances $1.9 Million Self-Storage Facility

Self storage building exterior with red doors

Liberty SBF has provided nearly $2 million in SBA 504 financing to a self-storage facility in Panama City, FL. The loan allowed the owners to refinance their property, while taking advantage of the low fixed-interest rates and long terms of SBA 504 loans to improve their cash-flow position.


Rate Hikes Haven’t Impacted Pricing or Volume … Yet

skyscrapers from below into the sky

While the Fed keeps bumping interest rates higher, and plans to keep doing more of the same, real estate pricing and availability have yet to show repercussions. Globe St. reports that while pricing and sales velocity are currently remaining unchanged, things could slow down toward the end of the year.


Affordable, Trendy Hotels Cash in on Consumer Demand

modern hotel bed with zebra pillows

What do millennials want? Good design. And what do they want to pay for it? Not much. The New York Times is reporting on the rise of the cheap, chic hotel that’s meeting consumer demand with low-priced rooms combined with trendsetting designs. And consumers can’t get enough.


Liberty Finances Hotel Projects in Georgia and Utah

st simons hotel pool exterior

Liberty recently provided funding for two hotel projects, a $7.7 million loan for a hotel on St. Simons Island, Georgia, and a $4.7 million SBA 504 loan for a hotel acquisition in Midvale, Utah.


Industrial Property Activity Spikes in the Midwest

aerial photo of warehouse in midwest

For months, East and West Coast metros have been feeling the heat of incredible demand for industrial properties, fueled by the “Amazon effect” and e-commerce logistics. Now, it looks as though the Midwest is getting involved, with a 103% increase in industrial CRE investment in Columbus, a 41% increase in Chicago and a 29% increase in Indianapolis.


How Can We Help You?

Liberty SBF is the #1 ranked non-bank SBA 504 lender by volume in the country. We offer personal service for SBA 504, bridge and conventional loans. We’d love to help you.

Let’s Talk. 

News Roundup: Good News for the Carolinas, The Impact of Driverless Trucks and the Latest CRE Forecasts through 2020

 

SBA Announces Deferments for Hurricane Florence Businesses

Flooded residential streets

If you didn’t expect to see the kinder, gentler side of government loan programs today, prepare to be surprised.  The SBA has announced that businesses affected by Hurricane Florence in North or South Carolina can apply for up to a 9-month deferment of their qualified SBA loans, including SBA 504 loans.


Liberty Provides Over $38.4 Million In Warehouse and Industrial Financing

warehouse exterior with trucks

Over the past 3 years, Liberty SBF has provided more than $38.4 million in SBA 504 financing for warehouse and industrial projects.  Recently, the company provided a $9.1 million SBA 504 loan for an industrial property in San Diego, CA.


What Driverless Cars and Picking Robots Mean for the Warehouse Sector

Robot arm in warehouse

With new laws for driverless vehicles on the books in 29 states, and robots already playing a key role in Amazon warehouses, it’s time to think about what automation means for warehouses.  NREI takes a look at what happens when warehouse tenants embrace a highly automated present, and future.


Florence’s Effect on CRE

Flooded neighborhood

As hurricane recovery from Florence gets into full gear, there may be a silver lining in some sectors.  Several experts are predicting an upswing in multifamily housing and hotel trends in the Carolinas over the coming months. One change that might differentiate this from past hurricane recoveries?  Many of the damaged homes are second homes, which could affect predictions.


Liberty Provides Over $12-million in Hotel Financing

hotel in Utah

In recent years, Liberty SBF has provided more than $12-million in financing for hotel projects. Most recently, the company provided $4.7 million in SBA 504 financing for a hotel in Midvale, UT.


A Strong Forecast for CRE Through 2020

City view of skyscrapers and residential houses

The latest edition of the Urban Land Institute’s Real Estate Economic Forecast is predicting good news across all major sectors of commercial real estate, and revising up their forecast from earlier in the year.  Check out their summary article here, or dig into the nitty-gritty details for yourself right here.


How Can We Help You?

Liberty SBF is the #1 ranked non-bank SBA 504 lender by volume in the country. We offer personal service for SBA 504, bridge and conventional loans. We’d love to help you.

Let’s Talk. 

News Roundup: Optimistic Small Business Owners, E-Commerce Pushes Demand for Industrial and CRE Investment up $10+ Billion

Small Business Owners Are More Optimistic Than Ever

Small Business Owners Being Optimistic

For 45 years, the NFIB has been surveying small business owners. In August, they reported being more optimistic about the future than they ever have been in the history of the survey. The previous high-optimism mark came in 1983, when a new Dodge Ram cost $5,665, Regan was president and a 2bd townhouse in Chicago would run you about $47,000.


E-Commerce Takes Over Former Industrial Spaces

Warehouse Workers in an eCommerce Warehouse

Leaving our homes to buy things is so last decade. And as we become increasingly reliant on e-commerce, The New York Times reports that industrial space is in hot demand, and much of it is being converted from manufacturing to distribution centers. The most valuable properties offer easy access to large metropolitan areas and major transportation arteries.


Liberty Closes $34.6 Million in SBA 504 Industrial Loans

A warehouse financed through SBA 504 small business financing.

Over the past 24 months, Liberty has provided nearly $35 million in SBA 504 financing for strategically located warehouses. These transactions range from a $1.7 million warehouse in Riverside, CA, offering easy access to the LA Metro area, to an $11 million warehouse near Bristol, PA, that’s within an hour’s drive of both the New York and Philadelphia metros.


Q2 CRE Investments Up $10+ Billion

Q2 CRE investments are up significantly.

New data from Real Capital Analytics suggests that the commercial real estate investment volume is up 9.1% from the first quarter of 2018. This growth was led by the Western U.S., which posted $32.2 billion in Q2 activity.


Liberty Wraps Up $16.5 Million in Office Space SBA 504 Loans

SBA 504 Financed Office Buildings

The closing of a $5.4 million office building in Newport Beach, CA, marks a cumulative $16.5 million in office space acquisitions through Liberty-led SBA 504 loans over the past two years.


The Cases For and Against “Previewing” Real Estate Listings

Pocket listings are nothing new to real estate, but a new plan for sneak-peek marketing from a New York brokerage is reigniting the debate. And while commercial listings land outside the MLS, it’s worth thinking about ways that pre-release marketing could help (or hurt) buyers, sellers and brokers.


How Can We Help You?

Liberty SBF is the #1 ranked non-bank SBA 504 lender in the country. We offer personal service for SBA 504, bridge and conventional loans. We’d love to help you.

Let’s Talk. 

Commercial Real Estate News Wrap Up From Liberty SBF

Good news – third quarter loan originations were up 5% compared to the year-ago quarter and up 7% as compared to Q2 2016, according to a report published by CoStar. Even better news – commercial mortgage backed securities enjoyed their own jump in Q3, with a 32% year-over-year increase in the dollar volume for industrial properties and a 26% spike for multifamily. Other real estate sectors such as office and retail saw slight drops in lending volume, perhaps pointing to the trend of growing concentration of CRE loans by lenders.

After the recent elections, there’s a lot left that the commercial real estate wants to know, as published in a recent article by Globest.com. Questions from the commercial real estate community include what the budget would be for next fiscal year, Trump’s plans to unwind the Affordable Care Act, and what the regulatory scale-back would look like when it begins. As for the Washington DC commercial real estate market, Bill Collins of Cushman and Wakefield is bullish, believing that the GOP control of both the presidency and Congress is going to be beneficial in boosting the local economy.

Banks have tightened standards on CRE loans during Q3 but have left lending practices for commercial and industrial loans virtually unchanged. According to a recent survey of loan officers released by the U.S. Federal Reserve, “significant net fractions of banks reported tightening standards for construction and land development loans and loans secured by multifamily residential properties.” This survey covered the responses of 69 domestic banks and 21 U.S. branches of foreign banks, showing a growing trend towards regulation within the whole market.

8 + 1 (That’s 9) Things You Need To Know About CRE Right Now!

Commercial Real Estate News Wrap Up From Liberty SBF

U.S commercial real estate prices have reached new highs, but the sector is a much safer place today than it was before the 2008 financial crisis. According to a recent article by Rani Molla of Bloomberg Gadfly, recent trends within commercial real estate that point to a recession have been offset by other factors within the market. Low capitalization rates have been offset by increasing spreads within 10 year Treasury rates, which have lowered the cost of borrowing greatly. Furthermore, over 30% of senior loan officers have reported tightening standards on loans at their banks, thus avoiding many of the risky practices that helped cause the last real estate crash.

Andrew Nelson, chief economist of Colliers International, recently sat down with the San Diego Union-Tribune to discuss real estate trends to look for in 2017. Mr. Nelson highlighted the positive impact of globalization, stating, “there isn’t any doubt that it’s been a positive force for economic growth and U.S economic growth as a whole.” In terms of real estate, Mr. Nelson said to look out for the growth of urban centers for the office market, entertainment centers and destination shopping for the retail market, the increasing role of institutional investors within the real estate market, and the increasing millennial market share within the multifamily market.

Researchers have found that the Brexit’s impact on US real estate has been minimal at best. At first, many economists and analysts speculated that investors would look to US properties as a safe haven for investment, but a Trepp report has found little impact on US real estate so far. Susan Person, senior director of research, in an interview with Bisnow, stated, “[We] basically determined that the data is not yet showing an impact … though we do think more foreign investments will eventually be driven to this country due to the Brexit vote.” She followed up by stating, “It might just be that even after two months it is jut too soon to determine. There has been a lot of discussion and worries about this, and it was overblown.”

8 + 1 (That’s 9) Things You Need To Know About CRE Right Now!

Commercial Real Estate News Wrap Up From Liberty SBF Oct 25 2016

Last week’s presidential debate brought up an important topic about owning commercial real estate – depreciation. Every year you are an owner of a commercial or residential property, you have the opportunity to deduct the depreciation from your income tax, which for Donald Trump is most likely a large amount. Furthermore, when combined with 1031 exchange rules, the tax laws favoring real estate have a large impact. The average firm in real estate development only pays just over 1% of income in taxes, while the average for all industries is almost 11% all together.

Although optimism may have been the theme of 2015 for capital markets, Phil Voorhees, an EVP for CBRE, claims that the theme for 2016 is uncertainty. Mr. Voorhees claims that the sentiment stems from the amount of macroeconomic impacting events recently happening – the US election, possible interest rate hikes, natural disaster, etc. However, on a better note, Mr. Voorhees states that, “It’s a record market for sellers, particularly of ‘A’ assets, and one of the best times for buyers taking advantage of modest leverage, record-low fixed-rate debt.”

Although U.S commercial real estate prices have reached new highs, the sector is a much safer place today that it was before the 2008 financial crisis according to Bloomberg. Although cap rates may have been falling, low borrowing costs and pressure from the Federal Reserve and government regulations have helped keep risky lending in check. Furthermore, bank construction and development loans are still 53% lower than their peak in 2008, with banks themselves lending against a smaller portion of property’s value today.

8 + 1 (That’s 9) Things You Need To Know About CRE Right Now!

Commercial Real Estate News Wrap Up From Liberty SBF

The recent $13.6 billion merger between Marriott and Starwood hotels is bound to create shockwaves across the hotel industry, as highlighted in a recent Bisnow conference. Andy Coleman, senior managing director of Berkadia, highlighted the upcoming challenge for lenders, stating, “So if we’re financing a Westin (a Starwood brand) and there’s a full-service Marriott across the street, [you need to ask] what’s the relationship between these hotels going to be?” Another topic highlighted was the opportunity for alternative hotel brands, who will attract investors looking to place capital in a now more competitive field.

The U.S property market landscape in 2017 is expected to be characterized by continued strong fundamentals, increased investor flows, and high transaction volume. As explained in a recent article by National Real Estate Investor, commercial real estate investors can expect the following five trends to play a significant role in 2017: global economic and political uncertainties, a low interest and cap rate environment, foreign investment in the US, a slowing new supply, and volatile energy markets. Impact is expected to vary considerably by region and sector, notable areas to watch out for include New York, Houston, and Chicago.

A new economic forecast finds that California and the Inland Empire region are both on track to outperform the nation over the next year or more. Christopher Thornberg, director of the UC Riverside School of Business Center for Economic Forecasting, believes the optimism behind this outlook stems from the external headwinds facing these economies. He expects that current drags that have slowed US exports and hurt commodity industries will continue to lessen, and that California and the Inland Empire area will reap the benefits combined with increasing median real wages and strengthening national labor markets.

8 + 1 (That’s 9) Things You Need To Know About CRE Right Now!

Commercial Real Estate News Wrap Up From Liberty SBF

While banks have become more selective about sponsors, nontraditional lenders have stepped up to fill the void left by conservative banks. In a recent event, panelists spoke about the impact foreign investors have had on the NYC commercial real estate market. In fact, Kuafa Properties EVP Jeff Dvoerett stated that his firm’s, “only disappointment this year [was] that it hasn’t had more transactions and investment opportunities.” Although these foreign investors may face hurdles, such as the upcoming election and the 421-a tax exemption, developers local to NYC aren’t worried about a sudden stop to the influx of capital coming from overseas.

In a recent report, Ten-X Research outlined several commercial real estate trends the market has seen in the first half of the year. Research shows falling cap rates within four of the five CRE segments, with office being the only sector that saw a modest increase. Commercial risk premiums increased in three sectors from Q1 to Q2, although it declined within the industrial and hotel segments. Finally, transaction volume across all five asset classes declined in Q2, continuing a downward trajectory. Still, despite the cooling of CRE markets, transaction volume totaled more than $100B, perhaps a sign of the continued confidence in US real estate despite global volatility.

Commercial Real Estate News Wrap Up From Liberty SBF

Increased consumer focus on value and experience has reduced overall store size, trimmed prices, and is instead injecting fun into traditional brick-and-mortar retailers. Chris Mailing, Colliers International Los Angeles Retail EVP, stated in an interview with Bisnow, “This is why outlet malls are proliferating,” and then noting that there are six times as many outlet malls today as before the 2008 recession. Mailing says that retailers growing in today’s environment ought to downsize stores and beef up online marketing, with a strategy of buying online for free store pickup or offer free shipping, which is in line with retailers such as Amazon or Target.

US Tech has remained vibrant and continues to provide resilience to top commercial real estate markets. In JLL’s latest Tech Office Outlook report, data showed that the technology sector drove nearly 25% of large office leasing activity within the 45 top US metro areas over the past two years, with 63% of these tech leases involving expansions as compared to the 48% of leases overall. In response to this increase in demand, landlords have raised their rates. Steffen Kammerer, SVP of JLL’s technology group says, “A healthy tech sector, particularly a ‘hub’ that anchors a vibrant tech ecosystem, has become the hallmark of a strong local economy.”

According to Real Capital Analytics, regional and local banks have moved to the top rung among commercial property lending classes, accounting for 21% of all commercial mortgage originations. The firm’s analysis believes that these lenders are stepping up in order to fill a critical gap as CMBS lenders have pulled back from lending. During this year’s first half, the Southeast and Midwest have especially rapid growth in lending activity by smaller banks, most likely due to these regions’ previous reliance on CMBS financing.

8+1 (That’s 9) Things You Need To Know

  1. CRE transactions in all sectors surpassed $100B in Q2 despite declining deal volume
  2. Chicago is highly desired by Middle Eastern investors
  3. These are the 26 major drivers reshaping real estate
  4. Airbnb: A risky situation for building owners
  5. How the CRE technology story will be continued
  6. All about the CRE information overload available to investors
  7. 15 years later, lower Manhattan has risen like a phoenix
  8. How to evaluate CRE investment opportunities with online lenders
  9. Big-box warehouse sector breaks records in demand and new construction