Economy in Review

Birmingham, Alabama is a city with a diverse economy that has been steadily growing over the past few years. The city has a strong presence in the healthcare, finance, and manufacturing industries. The unemployment rate in Birmingham is lower than the national average, and the job growth rate has been positive. The cost of living in Birmingham is also lower than the national average, making it an attractive location for businesses and residents alike.

According to the U.S. Census Bureau, the population of Birmingham has been growing steadily over the past few years. This growth has led to an increase in demand for housing and commercial real estate in the city.

Multifamily Market

The multifamily market in Birmingham has been strong in recent years. The demand for rental properties has been increasing due to the growing population and job market. According to data from the Bureau of Labor Statistics, the median household income in Birmingham is higher than the state average, which has contributed to the demand for higher-end rental properties.

Office Market

The office market in Birmingham has also been growing steadily. The city has a strong presence in the finance and healthcare industries, which has led to an increase in demand for office space. According to data from the U.S. Census Bureau, the number of businesses in Birmingham has been increasing over the past few years, which has also contributed to the growth of the office market.

Industrial Market

The industrial market in Birmingham is also strong. The city has a long history of manufacturing, and there are many industrial properties available for sale or lease. According to data from the Bureau of Labor Statistics, the manufacturing industry in Birmingham has been growing over the past few years, which has contributed to the strength of the industrial market.

Retail Market

The retail market in Birmingham has been growing steadily. The city has a strong presence in the healthcare and finance industries, which has led to an increase in demand for retail space. According to data from the U.S. Census Bureau, the number of retail businesses in Birmingham has been increasing over the past few years, which has contributed to the growth of the retail market.

Self-Storage Market

The self-storage market in Birmingham has been growing steadily. The city has a growing population, which has led to an increase in demand for storage space. According to data from the U.S. Census Bureau, the number of self-storage facilities in Birmingham has been increasing over the past few years, which has contributed to the growth of the self-storage market.

Hospitality Market

The hospitality market in Birmingham is also strong. The city has a growing tourism industry, which has led to an increase in demand for hotel properties. According to data from the U.S. Census Bureau, the number of hotels in Birmingham has been increasing over the past few years, which has contributed to the growth of the hospitality market.

Commercial Real Estate Loans by Purpose

There are many types of loans available for commercial properties in Birmingham, and the best fit for you depends on your investment strategy. Here are some broad categories of financing available.

Permanent Financing

Permanent financing is a type of loan that remains in place for an extended period of time. It's commonly used to finance the acquisition of commercial properties or to refinance existing debt. Types of permanent financing include bank loans, loans from government-sponsored entities like Fannie Mae and Freddie Mac, HUD loans, credit union loans, loans from life insurance companies, commercial mortgage backed securities (CMBS) loans, and other types of loans depending on the specifics of the commercial property.

Refinancing a Commercial Real Estate Property in Birmingham

I wouldn't quite call this a separate type of loan, but I have to mention refinancing in here. These are typically permanent loans (but not always) used to pay down an existing, partially amortizing or interest-only loan.

Often you may be able to time a refinance to happen after an interest rate drop — an ideal solution — but if your loan is maturing during a period of higher rates, you shouldn't stress too much about this. We'll work with you to find the best loan terms for your commercial property by reaching out to potentially thousands of lenders. Just complete the form below, and we'll get to it.

Construction Financing

Construction financing, also known as interim financing, is used to finance the cost of construction for commercial properties. It is usually a short-term loan that covers the cost of land development and building construction. Once construction is completed, the borrower can typically convert this into a permanent loan or pay it off with a new loan.

Bridge Loans

Bridge loans are a type of short-term loan that can be used to cover costs in the interim period between the end of one loan and the beginning of another. They are typically used in commercial real estate to finance the transition between construction financing and permanent financing. Bridge loans generally have higher costs than most other financing options and are often interest-only and non-recourse.

Commercial Real Estate Loans by Type

Depending on the purpose of your loan, you will have several financing options available to meet your investment goals. Read below to learn more about specific loan types.

Bank Loans

Bank loans are a common financing option for commercial real estate in Birmingham. They can offer competitive interest rates and flexible terms, but the specifics can vary greatly from bank to bank. While they may not always be the best fit for larger, more complex projects, they can be an excellent option for smaller, simpler properties.

Life Company Loans

Life company loans are typically used to finance high-quality assets in major markets. They generally have lower loan-to-value ratios than most other loan types but offer competitive interest rates and long terms. However, they may not be suitable for riskier projects or properties in less established markets.

Agency Loans

Agency loans, offered by government-sponsored entities like Fannie Mae and Freddie Mac, are typically used for properties that are mostly multifamily. They offer attractive loan terms, low, fixed interest rates, and are non-recourse. However, there are restrictions on the amount of income that can come from other commercial uses.

HUD Loans

HUD multifamily loans are government-backed loans that are primarily used for the construction, substantial rehabilitation, purchase, and refinancing of multifamily properties. These loans offer long-term, non-recourse financing with competitive interest rates but have extensive requirements for qualification.

CMBS Loans

Commercial Mortgage Backed Securities (CMBS) loans are a type of mortgage-backed security backed by commercial real estate loans. Lenders focus more on the strength of the property than the borrower's credit, making them a good option for properties with strong cash flow.

SBA Loans

Small Business Administration (SBA) loans, such as the SBA 7(a) and SBA 504, offer attractive financing options for small businesses. However, the maximum amount for an SBA 7(a) loan is $5 million, while SBA 504 loans can go up to $20 million. They cannot be used for multifamily properties and are only available for properties that the business owner occupies.

Mezzanine Loans

Mezzanine financing is a hybrid form of financing that combines elements of debt financing and equity investment. It is typically used in commercial real estate to fill a funding gap between the primary loan and the total cost of a project.

Commercial Property Insurance in Birmingham

This part isn't about loans, but it's just as important to your investment's success. Let's talk (quickly) about insurance.

Insurance premiums have skyrocketed in the past few years, as I'm sure you know. While multifamily gets a lot of the attention, rates for insuring anything from office buildings to shopping centers have jumped significantly.

Janover Insurance Group is dedicated to finding the best insurance solutions for your commercial real estate assets in Birmingham. Click to get a free insurance quote for your property — no obligation.