Are you an entrepreneur or business owner who is in need of commercial real estate loans? Now is as good a time as any to consider it especially since current interest rates can be as low as 3.50% for five-year terms and 4.50% for 20-year fixed! Whether you are looking for a commercial office space to open the business of your dreams or just a new location for your existing business you should be aware of a few things about commercial real estate lending.
1. Know The Market – Did you know that the rates of office vacancy are estimated to slightly decline from 15.7% to 15.6% through the fourth quarter of 2015? This information is great to know when you are relying on investors to get your commercial real estate loans. Knowing the market can help you decide when is best to make your move towards the commercial real estate loan that you are interested in.
2. Have A Defined Action Plan – Whenever you begin looking into starting your own business and buying commercial real estate you will most likely need to draft a business plan to present to potential investors. Within this business/action plan you will want to cram in all of the information you have about the commercial real estate you are interested in. This can be information regarding how you feel that you business will benefit the neighborhood, what you already know about the demographic and how you will reach them, or even your estimated revenue for your first year. The more information the better!
3. Show Your Investors That You Are Serious – In this day and age it is not surprising that investors are faced with dozens of decisions everyday and have no trouble at all saying “no” to plenty of them. That’s why, when you are applying for commercial real estate loans you need to make sure you set yourself above the rest. Right now it is estimated that there are 35 CMBS/conduit lenders in the market. Which one will lend to you?
According to a study conducted by Real Capital Analytics, for the first six months of 2015, the volume in U.S. commercial real estate priced over $2.5 million increased 36% from the same time last year. By knowing the market, having a defined action plan, and showing your investors that you are serious you could be a part of growing the last 6 months of 2015!