Commercial Loans Up, Hotel Market Trending in Right Direction

W Hotel Times Square lobby
Image by marcus_jb1973 via Flickr

The latest bit of good news: according to data gathered from the Federal Reserve, the amount of commercial real estate loans ticked up in April 2011.

Even better, the number of delinquent commercial RE loans has gone down in the hotels and lodging sector.  The data comes from Trepp, LLC, a leading provider of CMBS and commercial mortgage information, analytics and technology to the global securities and investment management industries.   The decrease in delinquent loans found across the country came in at a whopping 52 basis points bringing it down to 15.45%.   You can find more evidence of this positive movement from Crain’s Chicago Business.

Also on the sunny side: Colliers International says industrial real estate is poised for a rebound.  The brokerage believes manufacturing is coming back with a vengeance in several primary markets such as Chicago, Dallas, New Jersey and a few more.

What are some strategies for brokers?  While we are waiting for many of these sectors to recover, we still have the lowest interest rates in history, so brokers should recognize it’s an ideal time for those businesses with solid cash flow and a great credit rating to take advantage of the market.  Since there are only a finite number of these type of clients, many commercial brokers have gotten creative and have taken to listing and leasing more properties than they have done in the past.  These type of deals are smaller in transaction number, but are more plentiful in today’s market.  Yes, it’s a lot more work for less money, but it’s a great way to push the market until things improve.  It’s also a great way to build relationships with those business owners who don’t have stellar credit, but do have a great product and decent cash flow,  who could turn into a loyal client because you were willing to work with them when they needed you the most.

Consider specialization – many brokers are now specializing in green buildings or industrial make-overs in up and coming areas in order to carve a niche out for themselves, too.   This is the type of market where there are opportunities to be had and relationships are waiting to be built to take you into the improving market conditions.

Leave a Reply