Idaho is a state with a diverse economy, ranging from agriculture to technology. The state has seen steady growth in recent years, with a low unemployment rate of 3.8% as of August 2021, according to the Bureau of Labor Statistics. The state's population has also been steadily increasing, with a growth rate of 2.1% from 2010 to 2020, according to the U.S. Census Bureau. This growth has led to an increased demand for commercial real estate, making it an attractive market for investors.

When it comes to financing commercial real estate in Idaho, there are several options available. Traditional banks and credit unions offer commercial property loans, as well as private lenders and online lenders. It's important to shop around and compare rates and terms to find the best option for your specific needs.

Economy in Review

The Idaho economy has been steadily growing in recent years, with a GDP of $87.6 billion in 2020, according to the Bureau of Economic Analysis. The state's largest industries include agriculture, manufacturing, and technology. The agriculture industry is particularly important to Idaho's economy, with the state being a top producer of potatoes, dairy products, and trout.

The technology industry has also been growing in Idaho, with companies like Micron Technology and HP having a significant presence in the state. This growth has led to an increased demand for office space and industrial space in certain areas.

Multifamily Market

The multifamily market in Idaho has been strong in recent years, with a vacancy rate of just 2.7% as of Q2 2021, according to CBRE. The average rent for a two-bedroom apartment in Boise, the state's largest city, was $1,400 as of August 2021, according to RentCafe. Financing options for multifamily properties include traditional commercial property loans, as well as FHA loans and Fannie Mae and Freddie Mac loans.

Office Market

The office market in Idaho has seen some changes in recent years, with many companies shifting to remote work during the COVID-19 pandemic. However, there is still a demand for office space in certain areas, particularly in Boise. The vacancy rate for office space in Boise was 9.5% as of Q2 2021, according to CBRE. Financing options for office properties include traditional commercial property loans, as well as SBA loans and CMBS loans.

Industrial Market

The industrial market in Idaho has been strong in recent years, with a vacancy rate of just 2.4% as of Q2 2021, according to CBRE. The state's central location and access to major transportation routes make it an attractive location for logistics and distribution companies. Financing options for industrial properties include traditional commercial property loans, as well as bridge loans and mezzanine loans.

Retail Market

The retail market in Idaho has been impacted by the COVID-19 pandemic, with many retailers closing their doors permanently. However, there are still opportunities for investors in certain areas. The vacancy rate for retail space in Boise was 7.8% as of Q2 2021, according to CBRE. Financing options for retail properties include traditional commercial property loans, as well as SBA loans and USDA loans.

Self-Storage Market

The self-storage market in Idaho has been strong in recent years, with a vacancy rate of just 4.9% as of Q2 2021, according to CBRE. The state's growing population and demand for housing has led to an increased need for storage space. Financing options for self-storage properties include traditional commercial property loans, as well as bridge loans and mezzanine loans.

Hospitality Market

The hospitality market in Idaho has been impacted by the COVID-19 pandemic, with many hotels and restaurants struggling to stay afloat. However, there are still opportunities for investors in certain areas. The occupancy rate for hotels in Boise was 56.6% as of Q2 2021, according to CBRE. Financing options for hospitality properties include traditional commercial property loans, as well as SBA loans and USDA loans.

Commercial Real Estate Loans by Purpose

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

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 Idaho. 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 Idaho

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

By City

• Boise
• Meridian
• Nampa