Economy in Review

Sunnyvale, California is a thriving city with a strong economy. The city is home to many high-tech companies, including some of the biggest names in the industry. The unemployment rate in Sunnyvale is low, and the job market is strong. The city's economy is diverse, with a mix of industries that contribute to its overall growth and stability.

According to the Bureau of Labor Statistics, the average annual wage in Sunnyvale is higher than the national average. This is due in part to the high concentration of high-paying jobs in the area. The city's economy is expected to continue growing in the coming years, driven by its strong tech sector and other industries.

Multifamily Market

The multifamily market in Sunnyvale is strong, with a high demand for rental properties. The city's population has been growing steadily over the past few years, and this has led to an increase in demand for housing. According to the U.S. Census Bureau, the median rent in Sunnyvale is higher than the national average.

Despite the high cost of living, many people are still choosing to live in Sunnyvale due to its strong job market and high quality of life. This has led to a competitive rental market, with landlords able to charge premium prices for their properties.

Office Market

The office market in Sunnyvale is dominated by tech companies, with many of them headquartered in the city. This has led to a high demand for office space, particularly in areas close to major highways and public transportation.

Despite the high demand for office space, there are still opportunities for businesses looking to lease or purchase property in Sunnyvale. The city has a variety of office buildings available at different price points, making it an attractive location for businesses of all sizes.

Industrial Market

The industrial market in Sunnyvale is diverse, with a mix of manufacturing, distribution, and research and development facilities. The city's location in the heart of Silicon Valley makes it an attractive location for companies looking to establish a presence in the area.

There is a limited supply of industrial space in Sunnyvale, which has led to high demand and rising prices. However, there are still opportunities for businesses looking to lease or purchase industrial property in the city.

Retail Market

The retail market in Sunnyvale is strong, with a mix of national chains and local businesses. The city has several shopping centers and malls, including the popular Sunnyvale Town Center.

The retail market in Sunnyvale has been impacted by the COVID-19 pandemic, with many businesses forced to close or reduce their hours. However, the city's strong economy and high population density make it an attractive location for retailers looking to establish a presence in the area.

Self-Storage Market

The self-storage market in Sunnyvale is competitive, with several companies offering storage units at different price points. The city's high population density and limited living space make self-storage an attractive option for many residents.

Despite the competitive market, there are still opportunities for businesses looking to establish a self-storage facility in Sunnyvale. The city's strong economy and growing population make it an attractive location for this type of business.

Hospitality Market

The hospitality market in Sunnyvale is diverse, with a mix of hotels, motels, and short-term rentals. The city's location near major highways and tourist attractions makes it an attractive location for travelers.

The hospitality market in Sunnyvale has been impacted by the COVID-19 pandemic, with many hotels and other businesses forced to close or reduce their hours. However, the city's strong economy and growing population make it an attractive location for businesses looking to establish a presence in the area.

Commercial Real Estate Loans by Purpose

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

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 Sunnyvale. 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 Sunnyvale

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