Economy in Review

Sacramento, California is a thriving city with a diverse economy. The city has a strong job market, with employment opportunities in various sectors such as healthcare, education, government, and technology. The unemployment rate in Sacramento is lower than the national average, indicating a healthy job market.

The city's economy has been growing steadily over the past few years. According to the Bureau of Labor Statistics, the gross domestic product (GDP) of Sacramento increased by a significant percentage in the last year. This growth is expected to continue in the coming years, making Sacramento an attractive location for businesses and investors.

Multifamily Market

The multifamily market in Sacramento has been experiencing steady growth over the past few years. According to the U.S. Census Bureau, the vacancy rate for rental properties in Sacramento is lower than the national average. This indicates a high demand for rental properties in the city.

The rental rates for apartments in Sacramento have been increasing steadily over the past few years. This trend is expected to continue due to the high demand for rental properties and limited supply. Investors looking to invest in multifamily properties in Sacramento can expect a healthy return on investment.

Office Market

The office market in Sacramento has been growing steadily over the past few years. The city has a diverse range of businesses, including government agencies, healthcare providers, and technology companies. This diversity has helped to create a stable office market with low vacancy rates.

The rental rates for office spaces in Sacramento are competitive compared to other major cities in California. This makes it an attractive location for businesses looking to expand or relocate. Investors looking to invest in office properties in Sacramento can expect a stable market with good returns.

Industrial Market

The industrial market in Sacramento has been growing steadily over the past few years. The city has a strong logistics and transportation sector, which has helped to create a stable industrial market. The vacancy rates for industrial properties in Sacramento are lower than the national average.

The rental rates for industrial properties in Sacramento are competitive compared to other major cities in California. This makes it an attractive location for businesses looking to expand or relocate. Investors looking to invest in industrial properties in Sacramento can expect a stable market with good returns.

Retail Market

The retail market in Sacramento has been growing steadily over the past few years. The city has a diverse range of retail businesses, including shopping malls, grocery stores, and specialty shops. This diversity has helped to create a stable retail market with low vacancy rates.

The rental rates for retail spaces in Sacramento are competitive compared to other major cities in California. This makes it an attractive location for businesses looking to expand or relocate. Investors looking to invest in retail properties in Sacramento can expect a stable market with good returns.

Self-Storage Market

The self-storage market in Sacramento has been growing steadily over the past few years. The city has a high demand for self-storage facilities due to its growing population and limited living space. The vacancy rates for self-storage facilities in Sacramento are lower than the national average.

The rental rates for self-storage facilities in Sacramento are competitive compared to other major cities in California. This makes it an attractive location for investors looking to invest in self-storage properties. Investors can expect a stable market with good returns.

Hospitality Market

The hospitality market in Sacramento has been growing steadily over the past few years. The city has a diverse range of hotels and restaurants, catering to both business and leisure travelers. This diversity has helped to create a stable hospitality market with low vacancy rates.

The rental rates for hotels and restaurants in Sacramento are competitive compared to other major cities in California. This makes it an attractive location for businesses looking to expand or relocate. Investors looking to invest in hospitality properties in Sacramento can expect a stable market with good returns.

Commercial Real Estate Loans by Purpose

There are many types of loans available for commercial properties in Sacramento, 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 Sacramento

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 Sacramento. 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 Sacramento

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 Sacramento. Click to get a free insurance quote for your property — no obligation.