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Entries Tagged as 'Office Space'

A Good Time To Buy?

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It is a good time to buy office space if you have the cash. With the markets as depressed as they are, prices have dropped significantly on office building purchases. Reading the news, you will see many stories of lost office buildings or office buildings sold at a loss stories. Check out our Lease vs Buy section to find out if it would be a good decision for you.

One way to get into an office building purchase is to take advantage of the SBA’s 7(a) Loan Program: “This is SBA’s primary and most flexible loan program, with financing guaranteed for a variety of general business purposes. It is designed for start-up and existing small businesses, and is delivered through commercial lending institutions.

The 7(a) Loan Program is SBA’s primary program to help start-up and existing small businesses obtain financing when they might not be eligible for business loans through normal lending channels. The name comes from section 7(a) of the Small Business Act, which authorizes SBA to provide business loans to American small businesses. SBA itself does not make loans, but rather guarantees a portion of loans made and administered by commercial lending institutions.”

The SBA also offers the HTML clipboard CDC/ 504 Loan which provides long-term, fixed-rate financing to small businesses to acquire real estate or machinery or equipment for expansion or modernization. Typically a 504 project includes a loan secured from a private-sector lender with a senior lien, a loan secured from a Certified Development Company (CDC - funded by a 100 percent SBA-guaranteed debenture) with a junior lien covering up to 40 percent of the total cost, and a contribution of at least 10 percent equity from the borrower. The maximum SBA debenture generally is $1.5 million (and up to $2 million in some cases).

Generally, you will need only 10% down and can borrow up to $2 million. Since this is through a traditional lender, you will need to meet their standard qualifications and probably only qualify if you are in a large market. The banks do not want to have to take advantage of the guarantee.  If they do too often, they will find themselves off the list of banks allowed to make the 7a loans.

See our Financing Section for other alterntives.

 

Buying Office Space , Office Building Sales , Office Space

Three to Four Year Office Market Recovery?

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WASHINGTON (AP) -- The outlook for jobs became a bit less bleak with January's unexpected decline in the unemployment rate, which fell to 9.7 percent from 10 percent as more people said they had jobs.

Still, Friday's unemployment report showed just how deep the job crisis remains. The government now estimates 8.4 million jobs vanished in the Great Recession, and economists think the nation would be lucky to get back 1.5 million of them this year. And they say it will take at least three to four years for the job market to return to anything like normal. <End>

Not particurally good news for the office market. Employment is directly related to occupancy. If the econimists are correct, it means office space occupancy will take three to four years to return to normal vacancy rates in the 8% - 12% range.

Commercial Real Estate , Office Space , Office Space Negotiations , Office Vacancy Rate

Mortgage Banker vs Fed Reports - Conflicting Message?

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?So we have 2 apparently conflicting reports on the same day.  The Fed survey tells us loans are not loosening for commercial properties and then the Mortgage Bankers tell us that they increased in the 4th Quarter of 2009 over 2008. What's going on?

It seems pretty apparent what is happening, but it could be a confusing to some trying to figure it out. Basically, originations immediately after the crash in 2008 would have come to a standstill, 4th Q 2008 originations would be nil for commercial properties. Everyone was on hold.  Even a very low number of originations in 4th Q 2009 would be an increase. I'd be interested in finding out the numbers for 4Q 2007 and comparing to that. It seems to me to be a PR play by the Mortgage Bankers to have the public believe that they are doing commercial lending.

Buying Office Space , Office Building Sales , Office Space

MBA reports increase in 4Q Commercial Loan Originations

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The Mortgage Bankers Association (MBA) reported on Tuesday that commercial mortgage originations were at a higher level during the last quarter of 2009 than in either the previous quarter or in the 4th quarter of 2008, but multifamily originations continued to lag. The data was part of the MBA's Quarterly Survey of Commercial/Multifamily Bankers Originations.

Source: MND News Wire

Buying Office Space , Office Building Sales , Office Space

Fed Reports a Pause in Credit Tightening... Except for Commercial Real Estate

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Most large banks have stopped tightening standards on a number of loan types, according to a new report from the Federal Reserve. But the central bank’s latest loan officer survey says that while it may not be getting tougherfor consumers to borrow, it’s not getting any easier yet either because financial institutions have yet to unwind the considerable contraction that has built up over the past two years.

Market observers continue to lament the lack of financing available in the commercial sector, particularly with an estimated 1 in 5 commercial mortgages maturing over the next two years. If property owners are unable to roll this debt into new loans, analysts fear another real estate calamity could be on the horizon.

Full Article at DSNews.com

Buying Office Space , Office Building Sales , Office Space , Office Space Negotiations