A limited supply of commercial real estate inventory, coupled with the still plentiful availability of SBA financing at near record low rates, is creating a window of opportunity for small businesses to invest in their space.
"San Diego commercial real estate holds tremendous investment potential given the region's positive job and population growth and diverse economic fundamentals," said Barry Mahlberg, senior vice president with Burnham Real Estate. "The limited supply of commercial inventory compared to the residential markets, and particularly in light of current and projected demand, makes ownership an increasingly popular choice by small business owners."
Not only is SBA financing plentiful and affordable, but down payments as low as 10 percent for real estate purchases make it even easier for business owners to take advantage of some exceptional opportunities to own their space.
Kevin Miller, commercial loan officer at Wells Fargo (NYSE: WFC), the highest volume SBA lender in San Diego County, says "it's business as usual for Wells Fargo, and we continue to lead the market with 10 percent down financing for owner-occupied properties. With combined rates in the low 7 percent range, the dream of owning commercial real estate continues to become reality for our clients."
Wells Fargo has teamed up with Burnham Real Estate Services on numerous San Diego projects. Mahlberg alone has sold over 45 properties in the past 24 months utilizing SBA financing.
Whereas negative psychology in the residential real estate and lending businesses has dampened owner/user demand in the short term, Mahlberg said in the long run San Diego business owners will be happy to own their location and control their occupancy costs.
"What business owners need to realize is that commercial real estate fundamentals are strong, interest rates are historically very low and that the SBA and commercial banks are anxious to lend money. Moreover, with a limited supply of space on the horizon, the upside potential of commercial real estate investment is outstanding."
Mahlberg is the listing agent on several strategically located freestanding office building and condominium projects in San Diego County, including North Coast Business Park in Encinitas, Eastlake Village Limited Edition in Chula Vista and the Schiefer and Sons building at Petco Park in downtown San Diego. For more information, he can be reached at (858) 558-5636.