Commercial Real Estate Trends and Stats
Following the Great Recession in the late 2000s, commercial real estate is finally making a rebound. Increased consumer spending is just one of the driving forces behind the upswing. The National Association of Realtors projects that office and retail vacancies will decline. Investment sales of commercial real estate will grow. Consider these trends that are driving the change.
Technology Advances
Commercial real estate is taking advantage of newer technologies to speed up the funding process, letting investors and developers move forward quicker. Technology is also helping mortgage lenders reduce default rates, which helps to keep the economy more stable. Companies and lenders are integrating software applications into the operations of commercial real estate. This transition saves time and money, improves efficiency and increases the profit margin. Cloud and mobile technologies increase productivity.
Virtual Reality and Augmented Reality
What was once only available in sci-fi movies is moving into mainstream America. VR and AR let commercial real estate businesses plan a property much more effectively to save money during construction. Once the property is on the market, these technologies let agents showcase the property to clients around the world. VR and AR can be used for interior and exterior design.
Urbanization
Population growth in cities is creating a demand for public transportation, housing, retail and office space. Real estate is more investable and profitable than ever before. Investors are primed to make money in every sector of real estate.
Alternative Lending
The Great Recession didn’t only tank the economy, it changed the lending atmosphere. More regulations were placed on banks to avoid another economic disaster. This opened the door to alternative lenders with different options for funding. Here are some of your options:
- SBA Loans
Although SBA loans are traditional bank loans, they come backed by the government. More people are finding SBA loans a good option, but they are highly competitive. You’ll need excellent credit and a business plan.
- Bridge and Hard Money Loans
Bridge loans are good when your business is in transition. Maybe you need short-term financing while you work through your long-term financing. These loans are backed by the value of the property.
- Asset-Based Lending
Asset-based lending is for businesses who need working capital for growth but don’t have the funds to cover initial costs. You offer a percentage value of your company’s assets to the lender as part of the loan.
Commercial real estate financing is more diverse than ever before. You have multiple options to work out a loan to get ahead in your business.
