Philadelphia Metropolitan Area Real Estate Law Blog

Philadelphia residents who want fixed-income investments with high yields and greater security may want to look at loans collateralized by commercial real estate. Online lenders have helped fill in the gaps so that people can have greater access to these types of investments. However, before evaluating these opportunities, it is important that investors consider several factors regarding these online lenders.

Some Pennsylvania real estate developers occasionally encounter financing problems for their projects. Many might turn to an alternative type of debt called a hard money loan. There are several reasons why these types of loans should only be used in case of an emergency, however.

Many investors in Pennsylvania and around the country still think of the 2008 mortgage crisis and subsequent financial meltdown when they consider putting their money into real estate, but several years of healthy returns have nurtured at least some confidence in the nation’s property markets. The real estate sector has outperformed most other notable benchmarks in recent years, and these investments were placed in a separate class by MSCI and the S&P Dow Jones Indices on Sept.1.

Investors in Pennsylvania who have real estate as part of their investment portfolio may be aware that equity real estate investment trusts, also known as REITs, will be reclassified into a separate sector from the financials sectors. This will have a number of implications for investors.

Much has been written in recent months about a credit crunch that real estate buyers and investors in Pennsylvania and around the country may soon be forced to contend with. However, there is one part of the commercial real estate financing sector that has been growing rapidly. Crowdsourcing has grown from a cottage industry to a multi-billion dollar economic powerhouse in just a few short years.

Pennsylvania investors who follow the U.S. residential and commercial real estate markets are likely aware that their Chinese counterparts have been very active in recent years. During the 1980s, iconic American properties like the golf complex at Pebble Beach and New York City’s Art Deco landmark Rockefeller Center were scooped up by Japanese investors, but Chinese nationals now make up the largest group of foreign property buyers.

Officials in a Pennsylvania county are having a difficult time completing construction of an emergency communications system. For the past two years, Montgomery County officials say that they have been trying to convince township supervisors in Upper Merion to give them the zoning rights to construct a 180-foot tower. The $36 million project requires 30 towers, and so far all but one of the towers has been built.

Paying attention to economic trends may be helpful to those in Pennsylvania who are looking to invest in commercial real estate. Changes in demographics, geopolitical issues, decreased lending and shifts in consumer spending are just some of the factors that can influence commercial real estate prices. Unemployment statistics and the income levels of middle class households are other factors to consider.

Bank branches in Pennsylvania and across the nation look much the same today as they did in decades past, but the financial sector has been undergoing huge changes behind the scenes. Banking assets have increased from about $209 billion in the mid-1950s to an eye watering $15 trillion today, and the financial sector has gone from accounting for less than half of the nation’s GDP in 1955 to making up 83 percent of today’s economic output. However, perhaps the biggest change in American banking has been the shift from commercial and industrial loans to real estate-based lending.

Commercial real estate investors in Pennsylvania may be interested in some trends around retail real estate that are bucking typical expectations. Usually, restaurants can reliably act as anchors in shopping areas that are on the decline. They bring in more foot traffic and spending. However, for several quarters now, foot traffic and sales in the restaurant industry have been weaker.