Why Invest in Commercial Properties in 2022

Commercial Real Estate has shown significant growth in 2021 over what will forever be known as a year of uncertainty in 2020. What was once considered a shuttering market just over a year ago, multi-family residential is full steam ahead while industrial and office space properties are also ticking upwards. With so many changes over the last 18 months, you may be asking yourself, “Why invest in a commercial property?” Our question for you is, “WHY NOT?”

 

According to the "May 2021 RCA CPPI: U.S." summary report, U.S. commercial real estate prices rose at a 1.3% annual rate from April 2020 to 2021. Driving that increase were apartments (up 7.6% year over year) and industrial properties (up 9.4%), the retail sector (up 1.3%), and office buildings (up 3%). – Millionacres.com

 

Commercial and Office Spaces:

From the rise of unique office spaces, the opening of satellite offices in suburbia as well as the reopening of corporate headquarters, offices are seeing a resurgence and where they’re popping up is a surprise to many.

 

With many companies now embracing a strong sense of employee culture that includes comfortable yet trendy surroundings, loft offices are some of the more popular choices across several industries – turning what were once retail-only spaces into multi-use spaces. Now these property types are an appealing investment choice for many who are looking for a diverse portfolio with more limited means.

 

Suburban office space and smaller square feet options for satellite offices are also excellent investment opportunities for those looking to invest in a property outside of a metro locale. This also allows the property owner to work with an experienced tenant who has other offices established in other locations. These general use spaces are also easily flipped allowing a new tenant to take over quickly and easily.

 

While not increasing as quickly or as steadily as residential, office space will continue to tick upward as employers finalize their reopening plans and prepare for most employees to transition back into offices full time over the next year.

 

Retail Brick-and-Mortar:

Retail will continue to evolve and find its pace over the next 12 months. One of the most hard-hit markets due to the pandemic, retail owners saw a surge in online sales, however, an increase in sales also occurred via curbside orders. This particular piece to the sales pie increased alongside a retail company’s increase in direct social media posts – allowing buyers to “shop a store’s social media,” purchase their products locally while also being able to receive their products same-day.

 

With this, we will see locally owned retail opting to keep their brick-and-mortar store fronts, but possibly look to increase their product storage and reconfigure their backstock needs as curbside orders continue and online orders increase.

 

“Same Day Pick-Up!” “Curbside!” These are phrases that have been promoted to buyers since the start of the pandemic – even across larger brands and corporations – allowing buyers to enjoy a slightly altered shopping experience while also receiving goods same-day as opposed to shipping and possible delays.

 

Strip malls and larger retail developments have also adjusted their selling strategy by implementing these additional forms for buyers to receive their purchases – not just locally owned mom and pop stores. While not an ideal situation in an uncertain world, these adjustments helped to keep the doors open for retail – small and large – assuring investors that these particular sectors of commercial real estate were still very active and growing.

 

Multi-Family Residential:

The start of the pandemic saw college students, new graduates, young families and more moving back home with their parents or to other shared living situations with friends and family. The uncertainty of the economy produced a boom of residential real estate listings, however with states now opening back up, markets are seeing a resurgence of individuals and families needing temporary and/or more budget-savvy living options such as apartment and condo rentals. Multi-family commercial real estate has witnessed the greatest increase of growth and will continue to do so as more states, universities and places of employment begin to open back up to pre-pandemic standards.

 

What to Do Now

Always weigh the pros and cons to any investment situation as well as play out each scenario – especially if you are a first time commercial real estate investor – however, striking while the iron is hot will be key to maximizing your investment and cash flow early on. With unique opportunities on the rise across all branches of commercial real estate, investors will be able to build a path that suits their goals. Lending experts – such as our team at Commercial Capital BIDCO – can assist you with the funding you need that the banks simply cannot do. We are proud of our in-house credit team as well as our in-house credit committee that both allow us to process loans quickly and easily. What are you waiting for? We’re ready to talk investment goals when you are!

 


NACLB 2021: The Industry is Back!

NACLB 2021: The Industry is Back!

We rolled the dice on attending NACLB 2021 this year in Las Vegas and came out on top with a refreshed view of the industry and what we’re looking forward to in 2022! NACLB – the National Alliance of Commercial Loan Brokers – is one of the most revered organizations in the industry and their annual conference is always a gold mine of information and networking for seasoned and rookie brokers alike as well as banks and lenders.

After canceling the 2020 conference and going virtual like most all in-person events that year, it was a breath of fresh air to be back with like-minded brokers and peers again. While the time at our booth is always considered the most beneficial while at conference, we did enjoy the breakout sessions and the wide array of content each of those provided. The breakout sessions took on a new spin for this year with less “presentations” and more round-table style panel discussions across different topics. Topics spanned anywhere from Networking 101 to The Art of Closing the Deal (both sessions led by our very own Terry Luker) to Equipment Financing and Finding Your Niche.

We have always been firm believers in that Commercial Capital BIDCO is a unique lender as we are one of the few licensed bridge lenders that lend in the small balance space - $250k to $2MM. We’re also very fast and flexible – funding a fully underwritten loan in as little as 5 days. With our own in-house credit team and credit committee, we are able to offer our clients an experience that is far from cookie cutter…and we most certainly felt that this has held true at this year’s conference with our launch of The Commercial Broker Playbook – an eLearning platform for brokers of all experience levels. Keeping commercial lending brokers ahead of the game is where we want to be in 2022.

Looking back on 2021 and forward into 2022, we know one thing is for sure and that is that we are proud to be a part of industry that knows no bounds and doesn’t give up. We enjoyed hearing stories of perseverance and growth from other brokers across the country while at conference and cannot wait to see the creative thinking that will drive not only our team here at Commercial Capital BIDCO but with other brokers and lenders throughout the United States.

Thank you to NACLB for bringing the conference back in 2021! We cannot wait to be back at Caesar’s Palace in 2022.

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Want to learn more about our new e-learning platform The Commercial Broker Playbook and how it can up your game plan? Visit TheCommercialBrokerPlaybook.com today.