Home » Business, Headline

Commercial Mortgages Surge in Florida

8 June 2015 No Comment

Contractors Insurance 101Commercial mortgages have increased substantially in southern Florida from 2009 to 2014. Results from a study released by a Miami-based mortgage lender show that business loans in this category have tripled in volume over this time period.

Counties Involved in Upswing

In 2014, commercial mortgages that were financed reached over $11 billion. Three of the counties that generated the highest volume are:

  • Miami-Dade County at 57 percent
  • Palm Beach County at 23 percent
  • Broward County at 20 percent

Miami-Dade County

Miami-Dade County is located in the southeastern tip of Florida. It has the largest population in Florida, and ranks number seven in the United States for most populated. There are 35 cities as well as multiple unincorporated regions. Some parts are urban with high rises, and other areas are agricultural, so more sparsely populated. Some of the largest private employers in this county include:

  • University of Miami
  • Baptist Health South Florida
  • Publix Super Markets
  • American Airlines

Palm Beach County

Palm Beach County is the third most populated county in Florida, and the area has been increasing in population in recent decades. This county has multiple colleges and universities, including:

  • Florida Atlantic University
  • Lynn University
  • Northwood University
  • Nova Southeastern University
  • Palm Beach Atlantic University
  • Palm Beach State College

Broward County

Broward County is the second most populated county in Florida. This county has a total area of more than 1,300 square miles. While most of these square miles are land, 8.5 percent is water. Some of the points of interest in Broward County include:

  • The Museum of Discovery and Science
  • The International Swimming Hall of Fame
  • The International Game Fish Association

Seven Classes of Mortgages

The study broke commercial mortgages down into seven categories, including:

  • Land and construction
  • Retail
  • Multifamily
  • Industrial
  • Office Hotel
  • Other

Land is usually considered a risky investment, but when grouped with construction, it came in as the largest category, with mortgages totaling over $10 billion. The next highest group was retail at $9.4 million, and then came multifamily at $7.1 billion.

Private Lending

Not only were commercial mortgages up, but there was also an increase of over 13 percent in private lending by 2014. This is up from numbers right around 11 percent in both 2012 and 2013. Factors impacting this trend include:

  • More equity players entering the market
  • More private space
  • More competition coming from equity players competing for debt space

Competition Increasing

There is an increasing amount of competition for commercial mortgages. The competitiveness has led to:

  • More competitive rates
  • More competitive leverage

Because of the robust economy in southern Florida, many investors and businesspersons are eager to take out commercial mortgages to acquire properties. This has caused an upswing in the business-lending arena.

Comments are closed.