Economy in Review

Laredo, Texas is a city that has experienced steady economic growth over the past few years. The city's economy is largely driven by international trade, with its location on the U.S.-Mexico border making it a key hub for cross-border commerce. The unemployment rate in Laredo has remained relatively low, and the city has seen an increase in job opportunities across various industries.

According to the Bureau of Labor Statistics, the top industries in Laredo are trade, transportation, and utilities; government; education and health services; and leisure and hospitality. The city's population has also been steadily growing, with the U.S. Census Bureau reporting a population increase of over 10% between 2010 and 2020.

Multifamily Market

The multifamily market in Laredo has been strong in recent years, with a high demand for rental properties due to the city's growing population and job opportunities. The average rent for a one-bedroom apartment in Laredo is slightly below the national average, making it an affordable option for renters. Developers have taken notice of this demand and have been building new multifamily properties to meet it.

Office Market

The office market in Laredo has also seen growth in recent years, with new office buildings being constructed to accommodate the needs of businesses in the area. The city's location on the border makes it an attractive location for companies involved in international trade, and its relatively low cost of living compared to other major cities makes it an appealing option for businesses looking to expand or relocate.

Industrial Market

The industrial market in Laredo is closely tied to the city's role as a hub for international trade. The city has several industrial parks that are home to a variety of businesses involved in manufacturing, logistics, and distribution. The demand for industrial space in Laredo has remained strong, with developers continuing to build new facilities to meet the needs of businesses in the area.

Retail Market

The retail market in Laredo is also closely tied to the city's role as a hub for cross-border commerce. The city has several shopping centers and malls that cater to both local residents and visitors from Mexico. The retail market in Laredo has remained strong despite the rise of e-commerce, with many retailers choosing to open brick-and-mortar stores in the area to take advantage of its location and growing population.

Self-Storage Market

The self-storage market in Laredo has seen growth in recent years, with several new facilities being built to meet the needs of residents and businesses in the area. The city's growing population and job opportunities have led to an increase in demand for storage space, and developers have responded by building new facilities with modern amenities and security features.

Hospitality Market

The hospitality market in Laredo is closely tied to the city's role as a hub for cross-border commerce and tourism. The city has several hotels and motels that cater to both business travelers and tourists visiting the area. The hospitality market in Laredo has remained strong despite the COVID-19 pandemic, with many hotels implementing new safety protocols to ensure the health and safety of their guests.

Commercial Real Estate Loans by Purpose

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

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 Laredo. 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 Laredo

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