- Lending conditions continue to remain tight for commercial real estate investments. This is especially pertinent for small businesses and investors looking for properties in secondary and tertiary markets.
- In addition to tight underwriting, down-payment conditions also require substantial commitment. According to the 2012 Commercial Lending Survey, 72 percent of closed sales required a down-payment larger than 20 percent to secure financing, with seven percent of loans requiring 50-60 percent loan-to-value ratios.
- REALTORS® report that cash transactions account for almost 30 percent of sales.
- Investment activity recorded a positive 2011. Based on data from Real Capital Analytics, more than 13,000 major properties traded hands during 2011, totaling $205.8 billion in sales, representing a 51 percent increase from 2010.
- The data analyzes properties priced at $2.5 million and above. Based on the 2012 Commercial Lending Survey, REALTORS® handle an even larger number of transactions of properties valued at less than $2.0 million.
- The aggregate portfolio composition in this value spectrum is varied and representative of small business across the U.S.
- Multifamily sales were the largest property type, accounting for almost 20 percent of the market, followed by land sales, comprising 13 percent of sales. Industrial warehouse sales rounded up the top three, with 12 percent of transactions.
- Lending conditions continue to remain tight for commercial real estate investments. This is especially pertinent for small businesses and investors looking for properties in secondary and tertiary markets.
- In the wake of the post 2008-09 recession shakeout, large banks have been reluctant to underwrite commercial real estate investments.
- According to the 2012 Commercial Lending Survey, large national banks accounted for only 21 percent of commercial deals.
- In contrast, local banks provided the bulk of financing capital for commercial deals, with 64 percent of closed sales.
- Private investors and regional banks were the other major sources of funding, with 45 percent and 44 percent of sales, respectively.
- The Small Business Administration provided funding for 29 percent of closed transactions.
- International investors have always been attracted to the quality and stable fundamentals of U.S. commercial properties.
- After the 2008-09 recession, the percentage of cross-border investments in U.S. markets has risen from six percent in 2009 to 10 percent in 2011*.
- In comparison, 20 percent of Realtors®’ sales of commercial properties were made to international clients and investors, according to the 2012 Commercial Lending Survey.
*Source: Real Capital Analytics
- Investment activity recorded a positive 2011. Based on data from Real Capital Analytics, more than 13,000 major properties traded hands during 2011, totaling $205.8 billion in sales, representing a 51 percent increase from 2010.
- The data analyzes properties priced at $2.5 million and above. Based on the 2012 Commercial Lending Survey.
- REALTORS® handle an even larger number of transactions of properties valued at less than $2.0 million. In 2012, 85 percent of commercial sales were for properties priced under that threshold.
