Modest growth … cautious optimism.
The commercial real estate lending group at Investors Bank saw the first during the first quarter of 2021 and has the second in mind for the rest of the year.
Joe Orefice, the head of commercial real estate lending at Investors, said the bank completed $556 million in loans during the first quarter. The loans were provided to refinance existing commercial mortgages, acquire facilities and construct multifamily housing properties.
“We had modest growth in our CRE lending during the past 90 days,” he said. “We are cautiously optimistic, and we’re taking a balanced, strategic approach to making CRE loans because we see reassuring trends in many commercial property sectors.”
Orefice said the growth varies by class.
“I think that we’re seeing some good trends in most of the categories of commercial real estate,” he said. “Multifamily seems strong. Even retail seems to be coming back and improving. And industrial has remained a pretty hot commodity.
“Office is a little bit more of a question mark for us. From our perspective, there’s still a bit of a question on who’s going to back to work and when – and how much space will people need?”
Orefice said these thoughts and discussions figure to go on for some time. Capacity issues may be going away, but office decisions will be based more on when leases come up, he said.
“I think we’re going to see that play out over several years,” he said.
And Orefice notes there is another factor in play: How many companies in New York decide they want a New Jersey location — and how many companies in New Jersey decide they need a satellite location.
This movement is keeping multifamily hot, too.
“As people have maybe moved out of New York City and back in New Jersey, they’ve been able to raise their standard of living a little bit,” he said. “They may have a bigger apartment with a clubhouse and a pool and parking and even a nice grocery story nearby. And it costs less — so, they have more money in their pocket.
“I think that trend may stay here for a while.”
Orefice said one of the bank’s largest recent transactions was a $45 million loan to refinance the existing commercial mortgage for a 104,500-square-foot mixed-use building in Jersey City. The property houses 132 residential units and commercial space.
Orefice said the bank also had strong success in the Philadelphia and Eastern Pennsylvania markets — areas where Orefice is expecting an increase in activity going forward.
“The CRE group has been lending in this market for a number of years,” he said. “As the bank increases its presence in this region, we will be ready to use our CRE lending expertise and capabilities to structure loans to more local companies that are seeking financing.”
Here are some of the bank’s top recent CRE transactions in New Jersey:
- A $24.7 million loan for the acquisition of a 271,900-square-foot office building in Iselin. The property contains 22 commercial units;
- A $23 million loan for construction of a 231,000-square-foot multifamily housing property in Elmwood Park. The building will house 240 residential units;
- A $20.8 million loan for refinancing an 828,500-square-foot multifamily housing property in Freehold. It contains 172 residential units;
- A $13.4 million loan to refinance the existing commercial mortgage for a 46,600-square-foot multifamily housing property in Kearny. The property houses 45 residential units;
- An $11 million loan to acquire a 56,000-square-foot multifamily housing property in Woodbridge. The property houses 56 residential units;
- A $10.2 million loan to construct a 95,500-square-foot multifamily housing property in Netcong. The property will house 80 residential units.