Georgia has become a hotspot for commercial real estate investment, with a diverse range of property types available for financing. This article will provide an overview of the economy, multifamily market, office market, industrial market, retail market, self-storage market, and hospitality market in Georgia. We will also discuss financing options for each real estate type and reference data from the Bureau of Labor Statistics and U.S. Census Bureau where relevant.

Economy in Review

Georgia's economy has been growing steadily over the past few years, with a diverse range of industries contributing to its success. The state's GDP has increased by 4.1% in 2019, outpacing the national average of 2.3%. Key industries driving this growth include logistics, information technology, aerospace, and film production. The state's unemployment rate has also remained low, at 3.4% as of December 2019, according to the Bureau of Labor Statistics.

Population growth in Georgia has also been strong, with the U.S. Census Bureau reporting a 10.6% increase between 2010 and 2019. This growth has led to increased demand for housing and commercial real estate, making it an attractive market for investors and developers alike.

Multifamily Market

The multifamily market in Georgia has experienced significant growth in recent years, driven by strong population growth and increasing demand for rental housing. Financing options for multifamily properties include traditional bank loans, government-backed loans from Fannie Mae and Freddie Mac, and FHA loans for larger projects.

Office Market

Georgia's office market has seen steady growth, particularly in the Atlanta metropolitan area. Investors can finance office properties through traditional bank loans, SBA 504 loans for owner-occupied properties, and commercial mortgage-backed securities (CMBS) loans for larger transactions.

Industrial Market

The industrial market in Georgia has been bolstered by the state's strong logistics and manufacturing sectors. Financing options for industrial properties include traditional bank loans, SBA 504 loans, and CMBS loans for larger transactions.

Retail Market

Despite challenges faced by the retail sector nationwide, Georgia's retail market has remained relatively stable. Investors can finance retail properties through traditional bank loans, SBA 504 loans, and CMBS loans for larger transactions.

Self-Storage Market

With the growing population and demand for storage solutions, Georgia's self-storage market has experienced steady growth. Financing options for self-storage properties include traditional bank loans, SBA 504 loans, and CMBS loans for larger transactions.

Hospitality Market

Georgia's hospitality market has benefited from the state's thriving tourism industry, particularly in cities like Atlanta and Savannah. Financing options for hospitality properties include traditional bank loans, SBA 7(a) loans for smaller hotels, and CMBS loans for larger transactions.

Commercial Real Estate Loans by Purpose

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

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 Georgia. 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 Georgia

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

By City

• Atlanta
• Augusta
• Macon
• Savannah
• Athens
• South Fulton
• Sandy Springs