Commercial Real Estate Loans

As the deepest U.S. recession since the Great Depression grinds on, there are some hopeful signs for a turn around in the much diminished commercial real estate arena.

One factor helping to drive commercial building starts is the aging of America. As the Baby Boomer generation pushes the age demographic ever upward, more senior housing and nursing care facilities are needed. The result is an increase in construction starts for these two areas over last year, according to the Seniors Housing Construction Trends Report 2011.

According to David Schless, president of the American Seniors Housing Association (ASHA), it is an important but modest amount of new construction. “Until the capital markets change and the economy improves, we expect to see relatively muted levels of construction of market-rate seniors housing.”

Senior apartments are responsible for 49 percent of the new units currently under way, of which, only 8 percent fall under the category of market-rate properties. Another 20 percent of the new projects are independent living properties, with assisted living properties accounting for 16 percent and nursing care buildings 15 percent.

Another area of recent activity is commercial building investments in secondary markets across the country. This trend may be led by spiking valuations for office properties in a number of gateway cities. Continue Reading

There are many types of commercial real estate mortgages that are available. Deciding on the type of financing you need or want depends on many factors. One of the most deciding factors is your exit strategy. If you plan to buy and keep a retail center for a long time, you would consider a long term permanent loan with a fixed interest rate. If you want to buy an apartment building and your strategy is to flip it pretty quickly, you want to consider a loan that has a low upfront cost and low interest rate. Here are the most common types of mortgages and how they are best utilized:

Long Term Loans – These loans are up to 10 years in length, are fixed rate loans, usually have a prepayment penalty and are typically amortized over 30 years.

Short Term Loans – These loans are typically up to 3 years in length, have lower interest rates than long term loans and are typically amortized for less than 30 years. These commercial real estate mortgages may suit you if you plan on selling the property within a short period of time and overall would cost you less because it doesn’t have a prepayment penalty.

Conduit Loans – These mortgages usually have low interest rates, with long amortization periods and can be nonrecourse loans. Nonrecourse means that you are not personally liable for the loan. These are good for properties that are stable with credit tenants.

Small Business Administration (SBA) Loans – These loans are insured by the SBA, given through SBA approved lenders and they have some of the most favorable terms such as low down payments, lengthier loan terms, as much as 40 year amortizations and low interest rates. Most of these loans are given to owners who occupy at least 51% of the property and can be used as a construction loan if you occupy at least 60% of the building. Continue Reading

Successful businesses arise through professionalism, industry and focus. The premise of a business also reflects on the reception of the trade by the public. The physical address where you conduct your business speaks volumes about your products and services. Entrepreneurs go to great lengths to make their appearances appealing on the outside.

A new business trend has emerged in the market. Due to the high cost of living, businessmen have found alternative ways of establishing themselves. Many entrepreneurs are now using virtual offices and serviced premises. Serviced offices are apartments that allow people to put up a trade of their choice. These premises come without the expenses of sourcing, managing, or furnishing.

Operating businesses in leased premises can cause many problems in the future. Leases restrict entrepreneurs to a fixed address until the expiry of the contract. This can pose a huge loss in cases where the business has to expand to operate efficiently. If an organization needs to expand globally, binding agreements prevent any form of progress. Serviced offices allow you room for flexibility and grant you freedom to respond to change.

Companies offering serviced office space also provide a wide range of services to their clients. Besides having a notable business address, the client organization can also benefit from furniture and cleaning services. The cost of furniture can be overwhelming for small scale businesses. Furniture equipment can be helpful to beginners who only have operational capital. The task of looking for cleaning agents is unnecessary in serviced offices. The service companies offer reliable cleaners to their clients. Continue Reading