Regardless of today’s challenging landscape, the Commercial real estate lending market of real estate has continued to thrive. In the residential real estate arena, brokers offer genuine choices – a vital ingredient often missing in commercial lending. Brokers often introduce their clients to a vast array of services, loan products, and property lenders that borrowers might not have access to by going to a bank.
When the dust began to settle, the real estate industry experienced the most devastating blow in recent years, but still, commercial lending pushed through. The tightening of commercial real estate lending criteria has made it difficult for borrowers to access finance. Still, our brokers worked hard to find ideal solutions that fit their customer’s needs.
Top Trends in the Commercial REAL ESTATE Lending Market
Commercial real estate lending is looking upward as our society is slowly recovering from a pandemic-stricken world. The overall demand for commercial real estate loans rises as the economy recovers. In the last year, more than 5.4 million new business applications were filed in America, more than the 4.4 million from the year before. in 2019, before Covid-19 struck the world, the US witnessed around 3.5 million applications. Most of these businesses are a combination of firms planning to hire new employees and individuals who want to become self-employed.
The MBA (Mortgage Bankers Association) projects multifamily mortgages and commercial real estate lenders to break the $1 trillion mark because of the 13% increase in 2022. The record-breaking number results from several factors like a constant uptick in real estate values. Multifamily mortgage lending has also seen a rapid increase in demand and record levels of capital because of the global pandemic.
What Current Niches Are Finding Success?
In Commercial real estate lending, trends tend to come and go with time. The industry will continue to shift, primarily because it’s still recovering from the pandemic. However, some niches are finding success in commercial lending. These niches include:
Setting up a work-from-home office can be a little complicated. Since many people are moving from the workplace to their homes, many are investing money in storage facilities, especially self-storage. A remote worker living in a house with kids and other family members may have limited space to work with. They are now turning to self-storage to keep their belongings in the meantime.
Shared Office Spaces
Covid-19 has changed the working life of many people in the USA and worldwide. Almost 60% of all employees who can do their job from home are working remotely for the most part, if not all. However, some people still want that office feel, so they share space with other home employees. Such workplaces are the latest trend since remote work and shared office spaces are here to stay.
The global pandemic boosted a trend brewing for years: retail stores shutting down since more people are shifting to online-only sales. The growth in online shopping has led to a substantial increase in demand for warehouses. Many businesses use such facilities to store any extra products if they wish to make a stockpile. An increase in demand means more and more companies are using these facilities to raise their shipping output.
Firms like Moderna, Pfizer, etc., have spent millions of dollars investing in vaccine production and research and will continue to invest more in the foreseeable future. Such companies require extensive facilities to manufacture and develop vaccines. Covid-19 continues to mutate, increasing the demand for more booster shots, so these facilities will likely be around for the most part of this decade.
What Does the Future Hold for Commercial REAL ESTATE Lending?
Trends in the commercial real estate market tend to change now and then. The global pandemic has changed everyone’s lives worldwide and across several industries, including Commercial real estate lending. Demand for single-family and multifamily housing has risen as more people are trying to relocate.
Several businesses are now gravitating towards online-only stores, boosting the demand for warehouse facilities. Remote employees in some areas are now looking forward to shared office spaces. As long as these demands remain high, the real estate market will likely stay on the top for the next few years until new trends emerge.
Want To Find Out More About The Current Commercial Real Estate Market? Real Estate Funding Solutions Can Help!
Since we deal in real estate financing solutions, all our professionals like to stay updated with the latest trends in the market. If you wish to invest in commercial real estate but have been too busy to stay updated, our team can help! We have all the information related to real estate and can help you find deals worth your investment. Moreover, our team can help you quickly and efficiently get through the process. If you have any questions or concerns related to commercial real estate, contact our team at 855-913-8637 for answers.