Nebraska is a state located in the Great Plains region of the United States. The state has a diverse economy, with major industries including agriculture, manufacturing, and services. The state's population has been steadily growing over the past decade, with a current estimated population of over 1.9 million people. This growth has led to an increase in demand for commercial real estate, particularly in the multifamily and office markets.

For investors looking to finance commercial real estate in Nebraska, there are a variety of options available. Traditional banks and credit unions offer commercial property loans, as do specialized lenders and private investors. The terms and requirements for these loans can vary widely depending on the lender and the type of property being financed.

Economy in Review

Nebraska has a strong and diverse economy, with major industries including agriculture, manufacturing, and services. The state's unemployment rate is consistently lower than the national average, and the cost of living is relatively low compared to other states. According to the Bureau of Labor Statistics, the state's GDP grew by 1.9% in 2020, despite the challenges posed by the COVID-19 pandemic.

Multifamily Market

The multifamily market in Nebraska has been growing steadily over the past decade, with demand driven by population growth and a strong job market. According to data from the U.S. Census Bureau, the state's population has grown by over 7% since 2010. This growth has led to an increase in demand for rental housing, particularly in urban areas like Omaha and Lincoln.

Financing options for multifamily properties in Nebraska include traditional bank loans, as well as specialized loans from government agencies like Fannie Mae and Freddie Mac. Private investors and crowdfunding platforms may also offer financing for multifamily properties.

Office Market

The office market in Nebraska is driven by the state's strong economy and growing population. According to data from CBRE, the vacancy rate for office space in Omaha was 9.5% in Q1 2021, down from 10.5% in Q1 2020. This indicates a strong demand for office space in the city.

Financing options for office properties in Nebraska include traditional bank loans, as well as specialized loans from government agencies like the Small Business Administration. Private investors and crowdfunding platforms may also offer financing for office properties.

Industrial Market

The industrial market in Nebraska is driven by the state's strong manufacturing sector and central location in the United States. According to data from CBRE, the vacancy rate for industrial space in Omaha was 4.9% in Q1 2021, down from 5.3% in Q1 2020. This indicates a strong demand for industrial space in the city.

Financing options for industrial properties in Nebraska include traditional bank loans, as well as specialized loans from government agencies like the U.S. Department of Agriculture. Private investors and crowdfunding platforms may also offer financing for industrial properties.

Retail Market

The retail market in Nebraska is driven by the state's growing population and strong tourism industry. According to data from CBRE, the vacancy rate for retail space in Omaha was 6.6% in Q1 2021, down from 7.3% in Q1 2020. This indicates a strong demand for retail space in the city.

Financing options for retail properties in Nebraska include traditional bank loans, as well as specialized loans from government agencies like the U.S. Small Business Administration. Private investors and crowdfunding platforms may also offer financing for retail properties.

Self-Storage Market

The self-storage market in Nebraska is driven by the state's growing population and strong demand for storage space. According to data from the U.S. Census Bureau, the state's population has grown by over 7% since 2010. This growth has led to an increase in demand for self-storage facilities, particularly in urban areas like Omaha and Lincoln.

Financing options for self-storage properties in Nebraska include traditional bank loans, as well as specialized loans from government agencies like the U.S. Small Business Administration. Private investors and crowdfunding platforms may also offer financing for self-storage properties.

Hospitality Market

The hospitality market in Nebraska is driven by the state's strong tourism industry and growing population. According to data from CBRE, the occupancy rate for hotels in Omaha was 47.6% in Q1 2021, up from 43.5% in Q1 2020. This indicates a strong demand for hotel rooms in the city.

Financing options for hospitality properties in Nebraska include traditional bank loans, as well as specialized loans from government agencies like the U.S. Small Business Administration. Private investors and crowdfunding platforms may also offer financing for hospitality properties.

Commercial Real Estate Loans by Purpose

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

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 Nebraska. 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 Nebraska

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

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