2C — September 17 - October 21, 2021 — Fall Preview — M id A tlantic Real Estate Journal


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nvestors across all sectors of commercial real estate found 2020 to be challeng- By Andrew Speer, Polaris Funding Commercial real estate outlook – Full speed ahead, with a change in focus I

ever, many owners are shifting focus in terms of market loca- tion, asset type, and financing options. In terms of market location shift, suburban real estate markets have increased in popularity. Investors who pre- viously stuck to local urban core real estate are expanding into nationwide suburban markets, which offer recession resistant and pandemic resistant charac- teristics. Urban core locations have been slower to rebound as dense population markets have been struck hardest by COVID. Consequently, there is height-

ened investment interest in states such as Florida, Indiana, Colorado, and North Carolina as there is room to expand and social distance. Still, there is a healthy amount of sales activity in urban areas, but with cau- tion in large, densely populated cities. Regarding asset type shift, multifamily has gained demand among real estate owners. Though effects of the pandemic struckmultifamily, they are not as pronounced in comparison to other asset types. Office space is recovering but was widely affected by the pandemic as

remote work popularized and returning to office workspace has been slow. Retail is moving back toward stabilization with previously lost non-essential businesses now being reopened or replaced. Multifamily has experienced less effects of the pandemic and many investors are now adding multifamily to their portfolios. Types of financing have changed rank in popularity as well. With many properties having lower than typical sta- bilized occupancy, three-year term low interest rate bridge loans have become more popu-

a section of the MARE Journal Phone: 781-740-2900 www.marej.com S ection P ublishers Linda Christman lchristman@marejournal.com Lea Christman lea@marejournal.com S ection E ditor Karen Vachon editor@marejournal.com Fall Preview All information in this article is the opinion of the author based on experience with mar- ket participants. If you have a need for commercial mortgage financing or would like to know more about industry trends, please contact Polaris. lar. Agency loans continue to offer low rates and are attrac- tive for many owners with ame- dium hold period, such as 5-10 years. HUD loans are available with very low interest rates and are geared toward long term owners with 35-year loan terms. CMBS and Bank loans remain strong financing options for office and retail. For new construction as well as existing properties, local banks offer competitive financing terms. According to CBRE, U.S. multifamily investment vol- ume was about $191B in 2019, $111B in 2020, and will reach about $148B in 2021. The 2020 slowdown has caused investors to have unspent capital and mental fatigue from sitting on the sidelines. Many inves- tors believe now is the time to strike. The short-term and long-term future of commercial real estate is positive, with real estate owners strategiz- ing more toward short term gains in general. Despite the upcoming eviction moratorium end, slated for October 3, 2021, investors are charging forward and continue to focus on what they do best: driving value through rent growth, strategic operations, and renovations. Refinances have increased in 2021 given the low interest rate environment. Although a change in focus may be neces- sary for some investors, strong acquisition opportunities are available in the current mar- ket, along with excellent financ - ing options. Andrew Speer is director of structured finance at Po - laris Funding. MAREJ

ing, with na- tional sales volume down a tremendous 41.8% over 2019. In 2021 sales volume is rebound- ing, despite the lingering

Andrew Speer

effects of COVID-19 on the industry. There is a recent infusion of capital into the real estate sector and willingness to purchase and take risk. How-


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