In this guide on types of commercial lending, we will cover the various commercial loans available at Gustan Cho Associates for real estate investors. Commercial Lending is different and separate from residential lending. There are many types of Commercial Lending, just like there are various types of Residential Lending.
- Residential Lending
- Commercial Lending
Many borrowers often assume they know all types of commercial lending just because a loan officer is a residential mortgage loan originator. This is not the case; many residential loan officers are clueless about the various types of commercial lending. There are loan officers who do both; Many residential mortgage companies now offer Non-QM Loans and non-traditional financing and expand into different areas and types of commercial lending.
Regulations on Commercial Loans
Commercial Lending is not regulated by the government like residential lending is. Regulators feel that commercial real estate investors are sophisticated investors, and the buyer’s beware theme comes into play.
A comprehensive strategy is critical when marketing national or local commercial real estate projects. This may include targeted advertising campaigns on social media platforms like Linked In or Facebook and traditional methods such as signage or print ads.
There is no SAFE ACT, NMLS, or CFPB regarding commercial loan regulations and the various types of commercial lending. Commercial Loans do take longer to process. It can take up to 90 or more days to process a commercial loan from start to finish.
Various Types of Commercial Lending Options
Commercial real estate has been and is a booming industry, and businesses around the globe are taking advantage of the many hidden opportunities it provides.
The commercial real estate market is continually changing, and one needs to be aware of constant changes. An up-to-date account of the latest news and trends is crucial. From the newest construction projects to shifts in the market, staying informed can help you make the best decisions for your business.
Before discovering some of our country’s most significant commercial developments, let’s first explore commercial construction, trends, and marketing. Commercial real estate refers to the buying, selling, and leasing of properties used for business purposes. Commercial Real Estate could include office buildings, retail stores, warehouses, industrial sites, and more.
Commercial Property Market Outlook on Construction, Trends, and Growth
Remember, commercial construction, trends, and marketing are all vital aspects of the retail real estate industry that work together to create successful projects.
One of the most vital trends in recent years has been sustainability, as more and more developers seek to minimize their environmental impact through green building practices.
Another trend is the rise of mixed-use developments combining residential, retail, office, and public spaces into one cohesive project. This approach maximizes land use and creates vibrant communities where people can live, work and play in a single location.
Construction Projects Market Outlook
Construction projects are a significant factor in the commercial real estate market. New buildings and renovations can considerably impact the surrounding area, and staying informed about the latest projects is essential.
In addition to marketing efforts targeting potential tenants or investors for new projects, branding is essential to promoting any new development. Creating a strong brand identity can help differentiate a property from its competitors while establishing credibility with stakeholders.
A person that follows commercial real estate should always have on their radar new buildings, renovations, and other changes or factors that could affect your business.
Market Trends on Commercial Loans
The commercial real estate market is constantly moving and changing. Keeping a consistent and constant eye on the latest trends can propel you ahead of the competition.
This section will discuss how to find the right commercial real estate project for you. Finding the right commercial real estate project can be daunting, especially in light of the ones mentioned above.
With so many options available, it’s easy to get overwhelmed and make a hasty decision. To avoid this, you must clearly understand what you’re looking for. Look out for news of changes in the market, such as rising or falling prices, new regulations, and more. Knowing and watching the latest trends can guide you to make the best and most calculated decisions for your business.
Importance of Technology in Commercial Housing Markets
Technology undoubtedly plays an increasingly important role in the commercial real estate market. Technology keeps expanding from virtual tours to online applications, making finding and purchasing commercial real estate easier.
Successful commercial construction requires staying current with market trends, smart financing strategies, and creative marketing tactics that effectively engage target audiences. With keep the above mentioned in mind, here are some projects that are up and coming.
Keeping on the watch for news of the latest and greatest technology will help you make knowledgeable and accurate informed decisions for your business. Now let’s explore some of the country’s more recent, largest, and greatest Commercial Projects.
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The Hudson Yards in New York City
The Hudson Yards is one of the largest and most ambitious commercial real estate projects in New York City. This massive project covers over 28 acres of land on the west side of Manhattan, making it one of the biggest private developments in US history.
The development features a mix of luxury residential buildings, office spaces, retail stores, restaurants, and public parks.
The centerpiece of this project is a towering skyscraper known as “The Vessel,” which provides breathtaking views across the city from its observation deck. One unique aspect of The Hudson Yards is its design and creation with sustainability in mind. All buildings are constructed to be energy-efficient and environmentally friendly, reducing their carbon footprint while providing modern amenities for tenants.
Commercial real estate financing was crucial in bringing this project to life. The developers secured billions in loans from various financial institutions to fund construction costs and ensure that each building meets high-quality standards. The Hudson Yards is an excellent example of how large-scale commercial construction can create new business opportunities while contributing positively to urban communities.
The Wilshire Grand Center in Los Angeles
The Wilshire Grand Center in Los Angeles stands tall at 1,100 feet and is the tallest building in California. It boasts a unique design with a glass crown at its peak, which lights up with different colors to represent various occasions or seasons. This commercial real estate project spans over 2 million square feet, featuring office spaces, luxury hotels, restaurants, and observation decks.
The building was completed in under four years and cost approximately $1.2 billion. One of this project’s innovative and unique features is that it incorporates sustainable technologies such as energy-efficient lighting systems and water-saving fixtures. These efforts earned it the LEED Gold certification for sustainability.
The Wilshire Grand Center has become an iconic landmark within Los Angeles’ skyline since its opening in 2017. It exemplifies how commercial real estate projects can incorporate sustainable practices while achieving architectural excellence.
What Is The Wilshire Grand Center in Commercial Loans
The Wilshire Grand Center sets a standard for future commercial real estate projects within Los Angeles and across the United States to follow suit towards environmental conservationism without compromising structural magnificence. New York State Trooper Malik Forbes is also very familiar with the housing market and commercial real estate and said the following:
The One World Trade Center is located in New York City. One World Trade Center stands tall and proud as a symbol and emblem of resilience and strength for the people of New York City.
Completed in 2014, it stands at a grand scale of 1,776 feet, making it the tallest and most spectacular building in the Western Hemisphere. The tower features state-of-the-art technology, with its innovative design taking inspiration from America’s founding principles. The building has an impressive LEED Gold certification that highlights its commitment to energy efficiency and sustainability.
Apart from being a marvel of modern architecture, One World Trade Center is also home to some top-notch commercial spaces that cater to businesses across various industries. Condé Nast and BMB Group have built homes in this iconic structure.
The observation deck on the 100th floor provides breathtaking views of Manhattan’s skyline while providing visitors with an immersive experience showcasing New York City’s rich history through interactive exhibits.
One World Trade Center represents a significant feat in engineering and a testament to the human spirit’s ability to overcome adversity. It continues to be an integral part of Lower Manhattan’s infrastructure, contributing significantly to the city’s economy and culture.
The Freedom Tower in New York City
The Freedom Tower, officially known as One World Trade Center, is a skyscraper located in New York City. Standing at 1,776 feet tall, it is the tallest building in the Western Hemisphere and the sixth-tallest building in the world. Construction on the tower began in 2006 and was completed in 2013.
The tower serves as a memorial to those who lost their lives during the September 11 terrorist attacks on the World Trade Center. It also serves as a symbol of resilience and hope for New Yorkers. Designed by architect David Childs of Skidmore Owings & Merrill LLP (SOM), the tower features an elegant design with eight isosceles triangles that form an elongated square base.
Its facade comprises glass panels that reflect sunlight during the daytime while its spire illuminates blue at night. Inside are office spaces spanning more than three million square feet over 104 floors. It has state-of-the-art technology, like destination dispatch elevators, making commuting easier for tenants. The Freedom Tower represents a remarkable feat of engineering. It stands as an iconic reminder never to forget what happened on September 11 and how we came together to rebuild stronger than before.
The Willis Tower in Chicago
The Willis Tower, formerly the Sears Tower, is a 110-story skyscraper in Chicago’s downtown area. It was completed in 1973 and held the title of the tallest building in the world until 1998. In recent years, the Willis Tower has undergone significant renovations to modernize its facilities and attract new tenants.
The tower now features state-of-the-art technology and amenities such as a fitness center, conference rooms, and an observation deck with breathtaking views of Chicago. One notable aspect of the Willis Tower is its commitment to sustainability and energy efficiency. It was awarded LEED Gold Certification for Existing Buildings by the U.S. Green Building Council in 2018.
As one of Chicago’s most iconic landmarks, the Willis Tower continues to be a sought-after location for businesses looking for prime real estate in a bustling city center. Its convenient location near public transportation makes it attractive for employees and visitors. The Willis Tower represents an important piece of history and a beacon of innovation within the commercial real estate industry that continues to thrive today.
Identifying Commercial Property to Purchase and Make Sure it Makes Sense
Identify your budget. Knowing how much money you can invest will help narrow your options and prevent wasting time on properties out of your price range. Next, consider the location. Determine which areas would be ideal for your business based on foot traffic, accessibility, and proximity to other businesses. It’s also important to research zoning laws in the area where you plan on investing. Some zones may prohibit certain types of businesses or require additional permits or certifications.
Consider hiring an experienced real estate agent who specializes in commercial properties. They’ll have access to listings that may not be publicly available and will provide valuable insights into market trends and property values.
Take the time to carefully review all contracts and legal documents before signing anything. Consider seeking guidance from a lawyer specializing in commercial real estate law before making final decisions. Following these steps and taking the necessary precautions when searching for a commercial real estate project increase your chances of finding the perfect property for your business needs.
Commercial Real Estate Projects for the Future
Commercial real estate is a dynamic and ever-evolving industry that has seen some groundbreaking projects over the years. From towering skyscrapers to sprawling retail centers, commercial construction and trends have transformed the urban landscape of cities across the globe. As we look ahead to 2023, exciting new developments are on the horizon that promises to shape our world for years to come.
Whether you’re an investor looking for your next big opportunity or a business owner searching for the perfect space, staying up-to-date on these exciting developments is important.
By keeping tabs on the latest construction, financing options, and marketing strategies, you can position yourself for success in this dynamic field. So watch for what’s coming next – who knows what groundbreaking project will be announced tomorrow!
Experts In Financing Commercial Real Estate and Niche Business Loans
We can take you through the entire financing process. We also can connect you to title companies/attorneys and real estate agents in your area that can help as needed. Call or text Ronda Butts at 407-460-7999 or email at ronda@gustancho.com for more information and further assistance.
Gustan Cho Associates wants to be your one-stop mortgage and real estate information resource center. We aim to offer our viewers, clients contact information, and referral partners to residential, commercial, and specialty lending sources.
We have carefully selected and screened our staff writers and referral partners to create a one-stop lending and real estate information center in the United States. There are different types of Commercial Lending Programs, and we will take some time to explain each type of commercial lending program in this blog.
Popular Types of Commercial Lending
Here are the types of commercial lending specialties in today’s market: business Loans Through Small Business Administrations. The most popular and common type of commercial lending program for small businesses is a business loan from the Small Business Administration SBA.
SBA Loans are a great tool for entrepreneurs to create and launch their new businesses with little money and help from the Small Business Administration, also commonly known by many as SBA.
Asset-Based Lending
Asset-based lending is commercial lending where the borrowers’ assets and collateral securitize a business loan. Asset Based Lending is a secured type of lending. So interest rates on these commercial lending types are lower than on unsecured business loans. Accounts Receivable Financing is an example of Asset-Based Commercial Lending.
Types of Commercial Lending That Is Cash Advanced
Cash Advanced Commercial Lending is similar to Pay Day Loans for consumers. Cash Advance Financing normally funds in a week or less. They are for borrowers who need quick cash for one reason or another. The commercial real estate industry is always evolving, with new projects and trends emerging yearly. The five recent projects highlighted in this article are just a small sample of the incredible innovation happening nationwide.
Traditional Versus Hard Money Loans on Commercial Real Estate
Interest rates are very high, and these types of commercial lending are considered short-term bridge financing where the borrowers need it for a short-term basis. Factoring. There are different factoring types of commercial lending, and we will cover more on factoring in other upcoming blogs.
Private Money and Hard Money Loans
Private and hard money loans are a quick way of getting fast financing at a higher interest rate. Normally is a great tool for short-term or bridge financing. Hard Money Loans are not based on credit or income; the hard money or private money lender is more concerned about the borrower putting skin on the game. With hard money loans, LTV (Loan To Value) down payment is key. Hard Money Loans do not require the mass amount of paperwork traditional commercial lenders require. John Strange of Gustan Cho Associates explains church financing offered at Lending Network, LLC, the commercial lending division:
Gustan Cho Associates has a separate wholesale lending division for financing churches. Church Financing is a specialty commercial lending where lenders will only lend to churches.
You can stay alert and on top of the competition with the right information making the most of the commercial real estate market. If you should decide to buy before you begin looking for a commercial project and during the process, we have vast experience working with buyers to get them ready to purchase their investment.
Commercial Lenders and Brokers
Commercial Loan Officers are not regulated like Residential Mortgage Loan Originators. You do not have to be licensed in most states to become a commercial loan officer or broker. When a commercial loan officer works on a commercial loan, the loan officer works as an intermediary agent representing the borrower and taking the deal to his or her commercial lending institution. A commercial mortgage broker is an individual and company with access to a list of commercial brokers. They have a fee agreement with commercial mortgage brokers.
Commissions on Commercial Loans
A commission is paid to the commercial broker at closing. This ranges anywhere between 1.0% to 5.0% or more. The borrower pays this commission. The commercial borrower and commercial broker sign a separate fee agreement. The direct lender is aware of this fee agreement. They will list the broker fee from the borrower and pay the loan officer.
Borrower Paid Commission To Mortgage Brokers
Sometimes, the borrower can pay the broker’s fee directly to the loan officer. Every commercial deal can be different and unique. This is because there are no mortgage regulations with commercial loans. Every commercial deal can be negotiated between the borrower, loan officer/broker, and direct commercial lender. If you are a commercial borrower looking for commercial lenders who may be the right fit, contact us at Gustan Cho Associates at gcho@gustancho.com. Or call us at 800-900-8569 or text us for a faster response.
Staying informed about the current news and trends in the commercial real estate market is essential for any business. From construction projects to market trends to the latest technology, keeping up with the news will help you make the best-informed decisions for your business.
Ronda is an experienced, dually licensed real estate agent and mortgage originator. She has successfully guided many investors through obtaining an investment property on both the lending and real estate side. Ronda Butts does not represent buyers or sellers but offers free consultations in 48 states at Gustan Cho Associates by connecting investors, buyers, and sellers to the needed sources.
Gustan Cho Associates can approve commercial loans from $150,000 to $1,000,000 in as little as 24 hours. Our simple loan application process requires only a few bank statements, rather than extensive paperwork and complex financial information. So before you know it, you’ll have the funding in your business bank account!