According to the Federal Reserve survey of bank lending officers in May of 2014, many respondents said that they had eased the requirements for commercial real estate loans. This is great news for builders and buyers who are looking to invest in commercial real estate. In fact, in every financial quarter since the economy started to recover half way through 2010, a sizeable percentage of the lending officers surveyed did indeed report that they were easing the standards for commercial real estate loans. Available financing is not as hard to come by as it was only a few years ago.
New Office Construction
There has been a modest, but very real upswing in the construction of new office buildings. Office construction swelled to sixty million square feet, which represents a ten percent increase from the previous year.
This shows no signs of slowing down either, as companies such as Panasonic, Google, AT&T and others have all announced plans to invest millions in new corporate buildings in major centers all across the United States.
In Atlanta, national construction heavyweight DPR Construction purchased locally renowned developer Hardin Construction in April 2013. The two companies have combined their operations in the Southeast and Texas markets. With this growth in the number of offices and employees, DPR Hardin Construction will have greater opportunity to handle major commercial projects in the Southeast market.
Retailers Are Spending Money on Construction
While the increase in the construction of new office complexes was moderate, the jump forward in the construction of new retail space was substantial, increasing by twenty-five percent in 2013 when compared to 2012. There was one hundred and five million square feet of retail space constructed in 2013 in the United States, with much of it built by discount and outlet stores.
Although the economy is recovering, there is still uncertainty felt by many consumers. Therefore, discount and outlet retailers thrive in such circumstances. For example, Wal-Mart alone built 287 stores in 2013, which amounted to 19 million square feet of new commercial real estate around the United States.
In addition, to accommodate the increase in retail space, the square footage in warehouse space has jumped fifty percent, to a whopping ninety-six million square feet in the United States.
The Economy Will Continue To Grow
All of this new commercial development means that more people are working. Granted, this recovery has been sluggish compared to the recovery that usually follows a period of recession. In the 2014 edition of the highly influential publication “Emerging Trends in Real Estate, one economist was quoted as saying, We have a new paradigm here. It is not the kind of recovery we have seen before with 250,000 new jobs a month. It’s a recovery with 100,000-plus jobs a month.
Nonetheless, more people having money to spend means that the banks are less hesitant when it comes to approving commercial real estate loans. If you have been thinking about applying for a commercial real estate loan, now is the time to do so.
Each commercial real estate attorney at Hecht Walker are here to help guide and support startup businesses and established businesses alike, whether you need permitting assistance, rezoning representation, or even a legal eye review of your Purchase and Sale Agreement or Lease Agreements. An increased commercial economy creates more and more Landlord/Tenant relationships as well. Landlords and tenants will continue to have a vested interest in ensuring their legal rights are protected, and at times will need legal assistance in enforcing their rights. As commercial real estate attorneys, Hecht Walker is also here to help you protect and enforce your lease rights. As your business grows, contact Hecht Walker to ensure your legal rights are best protected.