Where’s the Money?

Northeast Indiana remains a stable and solid investment region for commercial real estate due in part to diversity of the industry, but also the strength of the regional banks.  The state of Indiana lending is strong and prospering in most cases.  In fact, Indiana is one of only 2 states in the United States that’s annual budget is balanced and has had very limited bank closures.

Last week SVN/Parke Group hosted a regional broker forum with a panelist of commercial lenders from northeast Indiana.   It was not only a great opportunity for collaboration and education, but also confirmed what I have been seeing in our market over the past 18 months.   Regional lenders are active and in the business of making loans that make sense.  I have always advised my clients to underwrite transactions well within conservative investment metrics, I have not experienced one transaction that has not come to fruition due to lending.

With this being said, there are definitely real estate investments struggling and are having difficulty finding lending.   From my experience if you have a solid plan, honorable reputation and reasonable expectations on return there is a lender that will most likely work with you in creatively putting a package together that works.    Unlike the Savings and Loan crisis 20 years ago, by in large throughout this recession, lenders are working with borrowers in these cases to come to a resolution or a transition plan.

Where is the Commercial Real Estate Rule Book?

Clearly, the last couple of years have been unpredictable in mild terms.   Commercial real estate owners and investors simply were not issued a rule book on how to handle these times.   Working with a substantive real estate advisor has never been more imperative than it is today.   It is vital that all business owners whether leasing or an owner occupant needs to surround themselves with an advisor who is a market expert and has been focused on understanding the new rules of these economic opportunities.

A couple of days ago I meet with a very strong business owner who’s company is a regional household name.   Despite their branding strength and savvy business experience, they have not been working with a substantive real estate advisor who understands their markets and the opportunities that exist.   Within an hour, I identified how we can reduce their annual overhead by over $100,000 with very little effort.   I suspect when we complete a full analysis of their portfolio we will identify multiples’ of this kind of annual savings.

The experienced real estate investment advisor understands the rules and can help you write your own rule book for your portfolio.   This is not business as usual.  For every hard luck story you hear, I can tell you a Cinderella recovery story or a success story of significant equity growth.    Understanding the market conditions, can be a great opportunity for owners and investors to significantly strengthen and grow their portfolio.