Construction in the United States has always been big business. Despite the economic slump over the past seven years, construction is still booming. And so are the loans behind them.
New construction loans for commercial properties are doing incredibly well. Commercial real estate lending is strong; commercial properties are being built at an incredible speed. Overall, the industry’s performance is quite impressive. In particular, commercial mortgage-backed securities (CMBS) are leading the way in the commercial construction loan business. CMBS are a kind of financial security that is backed by commercial rather than residential mortgage loans. Commercial mortgage loans are doing so well in part due to the emergence and flourishing of CMBS. Financial experts conclude that nearly $346 billion of CMBS will mature from 2014 to 2017. 2016 alone will see $113 billion in maturation. There are over 11,000 CMBS loans maturing through 2017 with 35 lenders offering them.
What does this all mean? Simply put, it means new construction loans for businesses and real estate developers across the country. It means more infrastructure, more business, more construction jobs, and more funds available for the public at large to handle. It means that American businesses can continue to grow and provide new opportunities for those who want to work and contribute to the nation’s business world. Most of all, it means that no matter how bleak the economy may seen, American lenders and developers are trudging forth in the quest to build newer, bigger, and better things.
The fact is, businesses couldn’t even exist were there no buildings, no construction projects, to hold them. The basis for any business is a secure location to house the business itself. For that and so much more, CMBS will continue to generate new construction loans, not just for borrowers but, in a way, for the entire country.