Commercial real estate is still a hot-ticket item

The business economy has been thriving and interest rates are still quite low. That combination of factors has made commercial real estate owners, investors and lenders very, very happy.

According to the newest reports, there are plenty of reasons to rejoice. Consider these statistics:

  • Delinquency rates have dropped considerably since the financial crises of the last decade or so. The rate of delinquency for packaged commercial loans was only 2.34% in the last two months of 2019. (Compare that to the 10.34% back in 2012 and you can easily see the cause for celebration.)

  • Commercial mortgage-backed securities were up to about $97.8 billion, which was a 27.08% increase over 2018. It's also the highest amount of new securities that have been issued since way back in 2007.

  • Mortgage rates on commercial properties are also down. Rates as low as 3% are being seen on some shorter-term mortgages.

  • Multifamily properties are also finding plenty of backing. Freddie Mac, for example, gave out $78 million in loans backed by such properties last year.

  • Apartment sales are up 10% from 2018, reaching an incredible $865.8 million, while cap rates for apartments are down to under 6%.

  • Construction on multifamily buildings and units are up, rising 7.8% over the previous year -- but that increase pales by comparison when you realize that there was a 74.6% difference when you compare just Decembers between 2018 and 2018.

No wonder the commercial real estate market feels hot and ripe for investment. If you're thinking about taking the plunge into commercial investments or if you simply want to expand your current real estate holdings, now may be the time to do it.