Commercial Property Loans in Ann Arbor, Michigan

Economy in Review

Ann Arbor, Michigan is a thriving city with a diverse economy. The city is home to the University of Michigan, which is the largest employer in the area. The healthcare industry is also a major contributor to the local economy, with several hospitals and medical centers located in the city. In addition, Ann Arbor has a growing technology sector, with many startups and established companies choosing to locate in the area. Despite the challenges posed by the COVID-19 pandemic, Ann Arbor's economy has remained relatively stable. The unemployment rate in the city has remained low compared to national averages, and many businesses have been able to adapt to new safety protocols and continue operating.

Multifamily Market

The multifamily market in Ann Arbor has remained strong in recent years. The city's growing population and strong job market have led to increased demand for rental properties. According to data from the U.S. Census Bureau, the median gross rent in Ann Arbor is higher than the national average.

Office Market

The office market in Ann Arbor has also been growing in recent years. The city's technology sector has led to increased demand for office space, particularly in downtown Ann Arbor. According to data from the Bureau of Labor Statistics, the professional and business services sector is one of the fastest-growing industries in the area.

Industrial Market

Ann Arbor's industrial market has seen steady growth in recent years. The city's location near major highways and transportation hubs makes it an attractive location for manufacturing and distribution companies. According to data from the Bureau of Labor Statistics, the manufacturing industry is one of the largest employers in the area.

Retail Market

The retail market in Ann Arbor has faced some challenges in recent years due to the rise of e-commerce. However, the city's strong economy and growing population have helped to support local retailers. Downtown Ann Arbor is home to many unique shops and restaurants, which draw both locals and tourists.

Self-Storage Market

The self-storage market in Ann Arbor has seen steady growth in recent years. The city's growing population and strong job market have led to increased demand for storage space. According to data from the U.S. Census Bureau, the number of self-storage facilities in Ann Arbor has increased in recent years.

Hospitality Market

The hospitality market in Ann Arbor has been impacted by the COVID-19 pandemic, with many hotels and restaurants experiencing decreased demand. However, the city's strong tourism industry and growing population are expected to support the hospitality market in the long term. In conclusion, Ann Arbor, Michigan is a thriving city with a diverse economy and strong real estate market. Despite the challenges posed by the COVID-19 pandemic, the city's economy has remained relatively stable, and many industries are expected to continue growing in the coming years.

Commercial Real Estate Loans by Purpose

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

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 Ann Arbor. 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 Ann Arbor

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