The future looks bright for commercial real estate development, and experts continue to be optimistic about a continued boom for the foreseeable future. This is despite what many see as continued economic and regulatory uncertainty that has affected the industry since the 2008 downturn.
Commercial Real Estate Growth
Industry experts base their expectations on two recent surveys:
- A KPMG survey of U.S. real estate executives found that owners and investors are not deterred by uncertainty over the current administration’s as yet unknown tax and regulatory policies, increases in interest rates, or the threat of cybersecurity risks, such as data breaches. In fact, 52% of those polled believe that improved real estate fundamentals in the coming year will be the biggest drivers of their company’s revenue growth. They also believe the U.S. economy will continue to grow, and that there will be robust access to financing and capital for new construction.
- The Commercial Real Estate Finance Council is the global trade association for the commercial real estate finance industry. It recently surveyed its members, all of whom participate in the U.S. commercial and multifamily real estate mortgage market. The survey found that, though some members believe the U.S. real estate cycle may have peaked, there is still ample credit available for new loans and refinancing.
- A clear majority of survey respondents – over 80% – believe commercial mortgage-backed securities will total between $50 and $100 billion in 2017.
- Nearly 70% have an optimistic outlook for real estate capital and credit.
- Respondents are divided on whether the market is at its peak or not, with 55% saying they believe it is, and 43% percent going for the middle.
All told, CREFC members seem to think the commercial real estate finance market will continue to benefit from economic growth, incremental increases in interest rates, and substantial availability of credit.
Handling High Volume Appraisal Orders
While this increase in commercial construction and development also means good news for the lending industry, it could put a strain on small to midsize banks’ ability to process loans. More loan requests, of course, means more appraisal ordering and management. An appraisal management company can help you handle that increase in loan requests by managing your appraisal process.
An appraisal management company’s ability to handle a high-volume of appraisal orders – while ensuring full regulatory compliance – removes a huge burden off your bank’s growing valuation responsibilities. An appraisal management company can help by working with you to facilitate the ordering, tracking, quality control, and delivery of appraisal reports. When you turn to an appraisal management company for help with all your commercial real estate appraisal needs, you’re free to handle a higher volume of loans which, in turn, fuels growth.
At Oxford AMC, we understand the unique challenges that come with complex commercial loans and are prepared to deal with a wide variety of property types, tenants, leases, and government regulations. From office complexes to restaurants and apartment buildings, we have the resources needed to deliver the high-quality evaluations and consulting services your bank needs.