The local commercial real estate markets are starting to see activity that gives rise to recovery. With prices on many properties down to decade long lows, buyers and tenants are coming back to the table.
While these people are now showing the willingness to invest, most need a financing partner. It is no surprise that one of the many obstacles to absorbing the record high levels of properties on the market has been lack of financing options. The commercial credit markets were pretty locked down over the past four to five years, but this too is beginning to change.
This year, there have been no bank failures in Washington State. Perhaps it is a poor sign of the times to say that lack of failure is evidence of success, but after 16 banks were shuttered in the previous three years, the fact that no closures occurred is indeed evidence of a building recovery.
In fact, many banks that were being watched as teetering on the brink are now off the watch list. The healthy banks are getting healthier, and the once troubled banks are returning to stable ground. The result is that loan appetite is returning to banks.
Besides the job market, availability of credit is the key component for commercial real estate markets to be healthy. Bankers’ growing ability to lend is a welcome sign of better times to come. This is good news for business owners looking for new space. With borrowing rates at all-time lows and prices at levels not seen in more than a decade, it is a great time to be in the market.
We’ve seen quite a number of clients this year who have capitalized on the environment. Whether it has been to find a better location, expand operations, or just plain save on occupancy costs, buyers and tenants are moving a great deal more this year than at any time over the previous three years.
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