Mississippi is a state with a diverse economy, driven by industries such as agriculture, manufacturing, and healthcare. The state's GDP has been steadily growing over the past few years, with a 2.5% increase in 2019. The unemployment rate in Mississippi is currently at 6.3%, which is slightly higher than the national average of 5.9%. However, the state has seen a decrease in unemployment since the beginning of the COVID-19 pandemic.

When it comes to commercial real estate, Mississippi has a variety of options for investors. The multifamily market has been strong in recent years, with an average occupancy rate of 94% and an average rent of $862 per month. The office market has also been growing, with a vacancy rate of 10.5% and an average asking rent of $18.50 per square foot. The industrial market has seen an increase in demand due to the growth of e-commerce, with a vacancy rate of 6.5% and an average asking rent of $4.50 per square foot. The retail market has been impacted by the rise of online shopping, but still has a vacancy rate of 8.5% and an average asking rent of $14.50 per square foot. The self-storage market has been growing in recent years, with an average occupancy rate of 90% and an average rent of $70 per month. Finally, the hospitality market has been impacted by the COVID-19 pandemic, but still has potential for growth as travel resumes.

Economy in Review

The economy in Mississippi has been steadily growing over the past few years, with a GDP increase of 2.5% in 2019. The state's major industries include agriculture, manufacturing, and healthcare. According to the Bureau of Labor Statistics, the unemployment rate in Mississippi is currently at 6.3%, which is slightly higher than the national average of 5.9%. However, the state has seen a decrease in unemployment since the beginning of the COVID-19 pandemic.

Multifamily Market

The multifamily market in Mississippi has been strong in recent years, with an average occupancy rate of 94% and an average rent of $862 per month. Financing options for multifamily properties in Mississippi include conventional loans, FHA loans, and USDA loans. Conventional loans typically require a down payment of 20-30%, while FHA loans require a down payment of 3.5%. USDA loans are available for properties in rural areas and require no down payment.

Office Market

The office market in Mississippi has been growing, with a vacancy rate of 10.5% and an average asking rent of $18.50 per square foot. Financing options for office properties in Mississippi include conventional loans, SBA loans, and CMBS loans. Conventional loans typically require a down payment of 20-30%, while SBA loans require a down payment of 10%. CMBS loans are available for larger properties and are typically non-recourse.

Industrial Market

The industrial market in Mississippi has seen an increase in demand due to the growth of e-commerce, with a vacancy rate of 6.5% and an average asking rent of $4.50 per square foot. Financing options for industrial properties in Mississippi include conventional loans, SBA loans, and bridge loans. Conventional loans typically require a down payment of 20-30%, while SBA loans require a down payment of 10%. Bridge loans are short-term loans that can be used to finance the purchase or renovation of industrial properties.

Retail Market

The retail market in Mississippi has been impacted by the rise of online shopping, but still has a vacancy rate of 8.5% and an average asking rent of $14.50 per square foot. Financing options for retail properties in Mississippi include conventional loans, SBA loans, and CMBS loans. Conventional loans typically require a down payment of 20-30%, while SBA loans require a down payment of 10%. CMBS loans are available for larger properties and are typically non-recourse.

Self-Storage Market

The self-storage market in Mississippi has been growing in recent years, with an average occupancy rate of 90% and an average rent of $70 per month. Financing options for self-storage properties in Mississippi include conventional loans, SBA loans, and bridge loans. Conventional loans typically require a down payment of 20-30%, while SBA loans require a down payment of 10%. Bridge loans are short-term loans that can be used to finance the purchase or renovation of self-storage properties.

Hospitality Market

The hospitality market in Mississippi has been impacted by the COVID-19 pandemic, but still has potential for growth as travel resumes. Financing options for hospitality properties in Mississippi include conventional loans, SBA loans, and CMBS loans. Conventional loans typically require a down payment of 20-30%, while SBA loans require a down payment of 10%. CMBS loans are available for larger properties and are typically non-recourse.

Commercial Real Estate Loans by Purpose

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

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 Mississippi. 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 Mississippi

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

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