Issue link: http://www.insightdigital.biz/i/51202
COMMERICAL LENDING demand grew in the sector. Denis confirms the trends hold true in Northeast Wisconsin, where thriving hub companies such as Marinette Marine seem to be having a ripple effect. "We are selling buildings and filling buildings on the manufacturing and warehousing side of the marketplace," says Denis. Multi-family housing hot Eppli also sees a mixed market, with sectors like multi-family housing complexes doing "crazy well." National research also shows that commercial properties in major "gateway" cities and prime locations or "core assets" in major cities are doing well. Expect that trend with core assets to expand to smaller markets, says Eppli. The overall economy also remains challenging. With predictions for growth in gross domestic product not bullish enough to drive sharp job growth, demand for new office space likely will be sluggish, says Eppli. Additionally, he adds, many banks across the country were too weak to take the loss on non-performing commercial real estate assets, but now that banks generally are stronger, they are shedding those assets, contributing to the supply of low- priced properties. Micoley's firm is involved in the auctioning of commercial properties and continues to see a backlog of foreclosed properties. Due to the lag time in foreclosure processes and in sales cycles for commercial properties, says Micoley, it's likely the market will have to "grind through" this backlog for a long time. "In my estimation, we are in the middle of that grind-through process," he says. So even as the market slogs through this trough-shaped recovery hoping to find a steeper improvement curve, there are some small upsides. For instance, says Micoley, some businesses that have downsized while leasing may now be in position to buy an ideal smaller building at a great price. Investors also need to put capital to work somewhere, notes Eppli, and with the bond market generating low returns and stocks volatile, investors will look anew at commercial real estate. "More and more (investors) are getting comfortable with real estate being the preferred, risk-adjusted asset to get into," says Eppli. Mangold notes that ultimately, banks also need to put money to work. "As we go into 2012, 2013 and 2014, banks will continue to come back to the (commercial real estate lending) market," he says. "With consumer demand lower for home loans, and residential housing sluggish, banks will need to pursue commercial real estate lending." Building a business really boils down to great relationships. It's something we felt strongly about in 1997 when we launched our own business, and a value we believe in even more today as we work with you to help your business grow. Understanding your business like no one else. Start the relationship today, call 888-686-9998. PARTNER WITH THE PEOPLE YOU KNOW AND TRUST. InvestorsCommunityBank.com 32 | INSIGHT • Januar y 2012 www. insightonbusiness .com