Commercial Lending Blog — Houlihan & O'Malley Commercial Services

Commercial Real Estate Market Continues to Grow – Consider Investing in It

By Brenda Sigurdson / August 9, 2022 / Leave a Comment

Despite the challenges presented by the pandemic, such as the decline in demand for office space, the commercial real estate market is growing at a good pace. According to experts, industrial and retail properties are performing the best, while the hotel and hospitality industry is recovering quite well. Plus, apartment buildings are becoming great investments as rents are rising across the board.

The housing shortage is likely to keep rents on the incline, with an expected increase of more than 10 percent over the next two years. The best performer in 2021? Multifamily investment volume surpassed any asset class in history ever, coming in at an impressive $352 billion worth of investments.

Why should you consider investing in the commercial real estate market? There’s always the good old standby: people are always going to need a place to live. And as the housing shortage and the resale market continue to careen on a dangerous path, more people will be looking to rent and be willing to pay higher prices to do so. These factors, along with the performance of the industrial and retail spaces, make it a better time than you might think to invest in commercial real estate.…

How a Commercial Real Estate Advisor Can Help with Your Portfolio

By Brenda Sigurdson / June 7, 2022 / Leave a Comment

Commercial real estate portfolios can hold and gain value for years to come if managed correctly, which is why it’s so important to understand how to properly diversify and leverage assets. To make sure investments are maximized for the best ROI, it’s a great idea to call an expert. That’s why consulting with a commercial real estate advisor can be critical, even if it’s just to bounce ideas around.

Real Estate Advisors vs. Real Estate Agents

A real estate agent can help you buy and sell property, but they are typically only focused on closing the transaction and moving on to the next one. Conversely, a real estate advisor does much more. In a nutshell, real estate advisors can evaluate real estate, assess short and long-term goals, and provide options for the best use of properties. A real estate advisor is a strategist who uses their extensive knowledge in real estate and finance to help increase the value of their clients’ assets. A commercial real estate advisor is someone who can take their years of experience in real estate and create actionable insights tailored to specific portfolios to help them thrive.

What Can a Commercial Real Estate Advisor do for …

Tips for a Successful Commercial Real Estate Listing

By Brenda Sigurdson / April 11, 2022 / Leave a Comment

Listing a commercial property for sale is drastically different than listing a residential property. Not only is the property most likely in a different bracket in terms of value, but it needs to appeal to an entirely different demographic.

Individuals and/or corporations purchasing commercial real estate have different needs, standards, and demands when it comes to commercial property. The very same features that may be considered a detriment when listing a residential property could be an important selling point for a commercial listing.

The process can also be a bit intimidating, especially when dealing with overly-aggressive investors or brokers looking to score a deal. Here are a few simple tips to help ensure the transaction goes smoothly.

The Commercial Sale

You’ve no doubt read about the intensity of the residential real estate market and, depending on the property type, the demand may be just as intense on the commercial side as well. The lack of supply of certain property types like industrial/logistics sites also gives sellers a huge advantage. Use the next section as a helpful guide when listing a commercial property for sale.

1. Use a Little Elbow Grease & Prep for Listing

It doesn’t matter what the property …

Choosing the Right Commercial Real Estate Brokerage Firm

By Brenda Sigurdson / March 18, 2022 / Leave a Comment

When you’re investing in commercial real estate, it pays to know when to call in the professionals. Choosing the right commercial real estate brokerage firm can save you time, money, and headaches. How do you know which firm is the right one for you?

Ask Questions

You wouldn’t choose a doctor without an interview. The same is true of a brokerage firm for commercial real estate. You want to know what you can expect from the relationship with your broker. The best way to learn what to expect is to have a conversation and ask the right questions. Some things you would want to know are:

How long have they been in business and what familiarity do they have with your property type? What kind of representation do they offer?
How do they plan to market the property?
What is their fee structure?
How many deals have they closed recently?

It is important to know that the broker representing your interests in the transaction has the requisite experience, knowledge and professionalism to properly market your property. The questions above are ones you will want the answers to after speaking with any prospective broker.

Negotiate Your Contract

Once you’ve obtained the …

When Are Appraisals Required for Commercial Real Estate Transactions?

By Brenda Sigurdson / January 25, 2022 / Leave a Comment

Unless you plan on purchasing a commercial property with cash, there are very few instances where your lender won’t require an appraisal of the property. This is a professional estimation of the market value of a property that is being considered for purchase.

As one might expect, the underwriting process for a commercial real estate transaction is quite a bit different than the process for a home purchase or refinance, as are the appraisals that are done for each property type. A residential appraisal strictly uses the sales comparison method to determine value. The appraiser will look at recent sales on the market and base their valuation solely on that after some adjustments for any property differences.

Your lender will want to be sure that the commercial space has productive use before they approve a loan, thus a commercial appraisal not only includes the sales comparison approach, but also an income approach. In an income approach, the appraiser will determine the income a property is likely to produce. This both helps to determine the value of the property and ensure that the property is capable of making enough income to service the debt.

Why Are Appraisals Necessary?

Besides the need …

3 Types of Commercial Property to Consider Investing In

By Brenda Sigurdson / October 28, 2021 / Leave a Comment

Commercial Real Estate (CRE) can be a great investment for you to consider adding to your portfolio. Consistent returns, passive income and the potential for appreciation are just three of the reasons why CRE might be a good investment for your portfolio. Of course, it is important to research and make sure the property you are looking at is a good investment. Not all commercial properties are equal. We recently reviewed 3 types of commercial properties in our blog – Types of Commercial Property to Invest In. In this blog we are reviewing 3 more types.

Industrial Property

Industrial properties consist of any property that is used for the storage or manufacturing of goods. This includes warehouses, factories, and logistics spaces used for distribution. These properties can range from relatively small to massive in size and offer an investor a variety of different options.

One possible advantage of investing in industrial property is that many tenants who rent these spaces are established companies conducting large-scale operations with a proven track record of success. This allows for stable cash flow to any investor looking to diversify their real estate holdings from more traditional residential investments.

Retail Property

Similar to industrial …

Types of Commercial Property to Invest In

By Brenda Sigurdson / July 27, 2021 / Leave a Comment

When investing in commercial real estate, you must consider a range of factors, including things such as the difficulty of owning and managing the property, the options that are available, and what you’re expected return on the investment would be.

Commercial properties have the potential to continue earning for you for years to come, however, you may be wondering which types of properties will work best for you. Let’s look at some of the most common property types to invest in.

Apartment Buildings

Properties that have at least five residential units are considered commercial properties and are worth looking into as an investment. There are plenty of reasons that make apartment buildings a good option to consider, but the core tenet of these is that there will always be a need for housing. Simply put, everyone needs to have a place to live and there is almost always more demand than supply, but as with everything else in real estate, location is key.

Some other factors that make apartment buildings attractive investments include the ability to raise rents in most years, helping to offset increasing costs and/or increase profit. Apartment buildings can also work well as tax shelters, and they …

$2,150,000 First Mortgage – 4-Family Brooklyn Investment

By Rich Salinaro / June 14, 2021 / Leave a Comment

H&O Capital Closes $2,150,000 First Mortgage

During the Covid-19 pandemic, the borrower in this transaction ran into trouble with his current lender due to some tenant payment issues. His current lender was pressuring him to pay them off, and even instituted the default rate, despite being only one month behind on his payments. Due to the time crunch, the borrower needed somebody who could get his deal closed quickly. H&O Capital Funding stepped in and were able to get him the money he needed in just 2.5 weeks.

H&O Capital Funding has helped countless real estate buyers, sellers, lessees and lessors achieve their goals. Our legacy is unwavering commitment to the communities we serve. Houlihan & O’Malley Commercial Real Estate Services specializes in four distinct, yet overlapping, areas of business: Commercial Brokerage services, Private Mortgage services, Appraisal Services and Advisory services.

For more information on loans that we offer, visit our website.

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Why Is Commercial Real Estate a Good Investment?

By Brenda Sigurdson / June 10, 2021 / Leave a Comment

Choosing the right investment vehicle can prove to be quite the challenge. Everyone has their own opinions about what type of investments are best and which will be the most lucrative, the easiest to manage, the least risky, etc. And, with all that handy insight and advice, how could you possibly narrow it down? Well, that starts by taking the time to explore the options yourself, learn what each offers and then decide what combination of investment vehicle and strategy works best for you.

In this blog we’ll take a brief look at commercial real estate, including what makes it a good investment and why so many people choose it.

Return On Investment (ROI)

One of the biggest benefits of commercial real estate investing is that it garners a much higher ROI, on average, than other investments, even when compared to residential real estate. When the deals are bigger, so are the returns. Just like how people are always going to need housing, people will always going to need a space for their business. Covid may have tweaked some of the rules, but it didn’t rewrite them.

Diversification

Another big reason people choose to invest in CRE is because it …

$440,000 First Mortgage – 2-Family Investment – Garfield, NJ

By Rich Salinaro / May 19, 2021 / Leave a Comment

$440,000 First Mortgage – Two-Family Investment

In this scenario, the borrower was looking for a small cash out on his recently renovated 2-family home in Garfield, NJ to help complete another project he was working on. Due to the nature of his work as a contractor without a W-2, as well as a few questionable financial decisions in the recent past, he was having some difficulty qualifying for a conventional loan. In stepped H&O Capital to provide the bridge financing the borrower needed. The loan was closed in just over 3 weeks.