If there’s one thing that the recent economic depression has taught banks, it’s to only take risks that they can handle. In light of the recession, banks implemented a lending freeze to reduce their risks, which went on for several years. The construction industry, where majority of businesses rely on lending, was among the industries that were worst hit.
However, with the economic recovery in full swing, financing has returned to the real estate and construction industries, including the commercial building construction sector. An article that appeared earlier this year in Buildings.com reflects the optimism in this area:
“As the economy continues to stabilize, non-residential construction will grow, spurred along by declining office and retail vacancies as well as growing commercial property values. The American Institute of Architects (AIA) predicts that spending will increase 5.8% in 2014 and 8% in 2015.
Led by the hotel and retail project categories, the commercial sector is expected to see the biggest gains in construction spending, with demand for institutional projects increasing at a more moderate level.”
In particular, there has been a noted rise in the demand and issuance of commercial mortgage-backed securities (CMBS). In local markets, such as Wellington, Florida, the return of CMBS is serving as a primary driver in the re-emergence of commercial building constructions.
The CMBS allows national and regional banks to provide financing to local businesses who want to build new establishments, or re-build existing ones. CMBS is a type of security backed by a mortgage on commercial property. It is provided by investment markets through banks and financial institutions that, in this set up, function as the middle man.
As banks gain greater confidence in lending due to the re-emergence of the CMBS, more businesses are seeing new opportunities to build their own establishments and facilities. While this is definitely a positive development, it also comes with downsides such as rising construction costs.
Thus, anyone who wants to start a commercial building construction in Wellington should not waste time in enlisting the services of trusted building contractors in the Wellington area, like Palm Beach County Contractor, before strong demands drive construction costs further up.
Whether it is an office, retail, or manufacturing building a business owner wants to put up, leading Wellington contractors can lay down the plan, and construct the property within the most reasonable time frame. Contractors who have a good track record and have built a solid reputation in an area will not risk their clients’ funds on low-quality materials and poor workmanship.
As important players in the full recovery of the construction industry, notable contractors can be relied to perform their jobs to the satisfaction of everyone involved.
(Source: Commercial Construction Forecast: Promising for 2014 and 2015, Buildings.com)