Commercial Property Loans in Saint Paul, Minnesota

Economy in Review

Saint Paul, Minnesota has a diverse economy with a mix of industries including healthcare, education, government, and manufacturing. The city has a low unemployment rate and a strong job growth rate, making it an attractive location for businesses and investors. According to the Bureau of Labor Statistics, the unemployment rate in Saint Paul was below the national average at the end of 2020.

The city's population has been steadily growing over the past decade, which has contributed to the demand for commercial real estate. The U.S. Census Bureau reported that the population of Saint Paul increased by over 5% between 2010 and 2019.

Multifamily Market

The multifamily market in Saint Paul has been strong in recent years, with a high demand for rental properties. The city has a large student population, which has contributed to the demand for multifamily properties near colleges and universities. Additionally, the growing population has increased the demand for rental properties in general. Investors looking to finance multifamily properties in Saint Paul can expect competitive interest rates and favorable loan terms.

Office Market

The office market in Saint Paul has been stable in recent years, with a mix of large corporations and small businesses occupying office space throughout the city. The downtown area is home to many of the city's largest employers, including government agencies and healthcare providers. Investors looking to finance office properties in Saint Paul can expect competitive interest rates and favorable loan terms.

Industrial Market

The industrial market in Saint Paul has been growing in recent years, with a mix of manufacturing and distribution facilities throughout the city. The city's central location and access to major highways make it an attractive location for businesses looking to distribute products throughout the Midwest. Investors looking to finance industrial properties in Saint Paul can expect competitive interest rates and favorable loan terms.

Retail Market

The retail market in Saint Paul has been stable in recent years, with a mix of large shopping centers and small businesses throughout the city. The city's growing population and strong economy have contributed to the demand for retail space. Investors looking to finance retail properties in Saint Paul can expect competitive interest rates and favorable loan terms.

Self-Storage Market

The self-storage market in Saint Paul has been growing in recent years, with a mix of large and small facilities throughout the city. The growing population and demand for rental properties have contributed to the demand for self-storage units. Investors looking to finance self-storage properties in Saint Paul can expect competitive interest rates and favorable loan terms.

Hospitality Market

The hospitality market in Saint Paul has been stable in recent years, with a mix of hotels and restaurants throughout the city. The city's growing population and strong economy have contributed to the demand for hospitality services. Investors looking to finance hospitality properties in Saint Paul can expect competitive interest rates and favorable loan terms.

Commercial Real Estate Loans by Purpose

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

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 Saint Paul. 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 Saint Paul

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