Economy in Review

Vancouver, Washington has a diverse economy with a mix of industries including healthcare, education, manufacturing, and technology. The city has experienced steady job growth over the past few years, with the unemployment rate remaining below the national average. The cost of living in Vancouver is slightly higher than the national average, but residents enjoy a high quality of life with access to outdoor recreation and cultural amenities.

The COVID-19 pandemic had a significant impact on the local economy, with many businesses forced to close temporarily or permanently. However, the city has seen a gradual recovery in recent months as vaccination rates increase and restrictions are lifted. The Bureau of Labor Statistics reports that job growth has resumed in several industries, including leisure and hospitality, education and health services, and professional and business services.

Multifamily Market

The multifamily market in Vancouver has remained strong despite the pandemic. Demand for rental units has remained high due to population growth and limited new construction. The U.S. Census Bureau reports that the city's population has grown by over 10% since 2010, with many new residents choosing to rent rather than buy homes. As a result, vacancy rates have remained low and rental prices have continued to rise.

Office Market

The office market in Vancouver has been impacted by the pandemic as many businesses have shifted to remote work. However, there is still demand for office space from companies in industries such as healthcare and technology. The city has several large office parks and is home to several major employers, including PeaceHealth and HP Inc.

Industrial Market

The industrial market in Vancouver has remained strong due to its proximity to major transportation routes and ports. The city is home to several large industrial parks and is a hub for manufacturing and distribution. The pandemic has increased demand for e-commerce and logistics facilities, which has driven up demand for industrial space.

Retail Market

The retail market in Vancouver has been impacted by the pandemic as many businesses have closed or reduced their hours. However, there are still several major shopping centers in the city, including Vancouver Mall and Columbia Tech Center. The city has also seen an increase in demand for grocery stores and other essential retailers.

Self-Storage Market

The self-storage market in Vancouver has remained strong due to population growth and limited new construction. The city has several large self-storage facilities and is home to several national chains. Demand for self-storage has increased during the pandemic as many people have moved or downsized their homes.

Hospitality Market

The hospitality market in Vancouver has been impacted by the pandemic as travel restrictions and reduced demand have led to lower occupancy rates. However, the city has several major hotels and is a popular destination for outdoor recreation. As vaccination rates increase and travel restrictions are lifted, the hospitality market is expected to recover.

Commercial Real Estate Loans by Purpose

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

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 Vancouver. 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 Vancouver

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