The numbers for the third quarter will be reported soon, but if we take a look back at the second quarter numbers, the commercial real estate financing in New York actually saw a decline, but it was extremely masked by massive size loans that were for just a few number of commercial real estate properties in the Big Apple. And because of the large size of these loans, many people didn’t even really notice the decline.
For example, one of the largest commercial real estate financing deals in New York happened to be the renovation of the well-known General Motors Building. The building is located on famous Fifth Avenue and is now home to an Apple store, which makes it the technology company’s flagship Fifth Avenue location. The deal was completed over the summer in June with a $2.3 billion-dollar price tag for the loan.
In May, the property located at 245 Park Avenue received $1.2 million dollars in commercial real estate financing. These two loans, along with a couple of other also larger loans happen to be significantly larger than any of the other loans approved in the New York City area during that quarter. Meaning that the top five loans in the city in the second quarter went on to total 20% (that is 1/5th!) of the total loan amount for the entire quarter.
The numbers for the second quarter in New York City technically fell flat according to Forbes. But some of the good news is that after seeing a 12% dip from the second quarter in 2015 to the second quarter in 2016, the market has actually stayed stable, not really seen a declining shift. But considering that the top five loans made up 20 percent of the total loans, the numbers actually do show a slight decline, but nothing too extreme.
But these numbers shouldn’t get you too worried or discouraged! They don’t necessarily mean that a slump is on the way and will be a common trend. It just means that the market experienced a bad quarter, but can hopefully it can bounce back quickly. The market just need to continue to focus on moving forward, but with caution, and keeping in mind the large amount of loans that are being approved.
Level 4 Funding LLC Private Hard Money Lender
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About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.