Ohio is a thriving state with a diverse economy and a strong commercial real estate market. This article will provide an overview of the various commercial property types in Ohio, including multifamily, office, industrial, retail, self-storage, and hospitality markets. We will also discuss financing options for each real estate type and reference data from the Bureau of Labor Statistics and U.S. Census Bureau where relevant.

With its strategic location, robust infrastructure, and business-friendly environment, Ohio has become an attractive destination for investors seeking commercial property loans. Whether you are looking to invest in an apartment complex, office building, warehouse, retail space, or hotel, there are numerous financing options available to help you achieve your investment goals.

Economy in Review

Ohio's economy is diverse and well-balanced, with major industries including manufacturing, healthcare, education, and agriculture. According to the Bureau of Labor Statistics, the state's unemployment rate as of August 2021 was 5.4%, slightly higher than the national average of 5.2%. However, Ohio has experienced steady job growth in recent years, with notable gains in sectors such as professional and business services, education and health services, and leisure and hospitality.

The state's population has also seen modest growth, with the U.S. Census Bureau reporting a 2.3% increase between 2010 and 2020. This population growth has contributed to increased demand for housing and commercial real estate across various sectors in Ohio.

Multifamily Market

The multifamily market in Ohio has experienced strong demand in recent years, driven by population growth and a shift towards renting. Financing options for multifamily properties include traditional bank loans, government-backed loans from agencies such as Fannie Mae and Freddie Mac, and commercial mortgage-backed securities (CMBS) loans. These financing options can provide competitive interest rates and flexible terms for investors looking to acquire or refinance multifamily properties in Ohio.

Office Market

Ohio's office market has seen steady growth, with demand driven by the state's diverse economy and expanding business sectors. Financing options for office properties include traditional bank loans, Small Business Administration (SBA) loans, and CMBS loans. These financing options can offer attractive terms and interest rates for investors seeking to acquire or refinance office buildings in Ohio.

Industrial Market

The industrial market in Ohio is robust, thanks to the state's strategic location, strong transportation infrastructure, and thriving manufacturing sector. Financing options for industrial properties include traditional bank loans, SBA loans, and CMBS loans. These financing options can provide competitive terms and interest rates for investors looking to acquire or refinance industrial properties in Ohio.

Retail Market

Ohio's retail market has experienced growth in recent years, driven by population growth and increased consumer spending. Financing options for retail properties include traditional bank loans, SBA loans, and CMBS loans. These financing options can offer attractive terms and interest rates for investors seeking to acquire or refinance retail properties in Ohio.

Self-Storage Market

The self-storage market in Ohio has seen strong demand, driven by population growth and an increased need for storage solutions. Financing options for self-storage properties include traditional bank loans, SBA loans, and CMBS loans. These financing options can provide competitive terms and interest rates for investors looking to acquire or refinance self-storage facilities in Ohio.

Hospitality Market

Ohio's hospitality market has experienced growth in recent years, driven by increased tourism and business travel. Financing options for hospitality properties include traditional bank loans, SBA loans, and CMBS loans. These financing options can offer attractive terms and interest rates for investors seeking to acquire or refinance hotels and other hospitality properties in Ohio.

Commercial Real Estate Loans by Purpose

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

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 Ohio. 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 Ohio

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

By City

• Columbus
• Cleveland
• Toledo
• Cincinnati
• Columbus
• Akron
• Dayton