If you’re in the market for commercial real estate financing in Massachusetts, there are several different options available. MassDevelopment, for example, specializes in complex projects and offers flexible financing terms to help small and midsize businesses. This financing helps businesses stay competitive and expand within the community.
Participating debt
Participating debt is a form of capital in which investors receive interest payments and a portion of the revenue generated from a commercial real estate property. This type of loan is typically used to fund commercial properties with stable tenants. Participating debt is usually secured by property equity and is typically subordinated to senior debt.
SBA 7(a)
If you’re in need of commercial real estate financing in Massachusetts, you may qualify for a loan through the SBA. This type of loan is designed to help small businesses and entrepreneurs with capital needs, such as property purchases and expansions. However, it is important to note that these loans come with many requirements. In addition to these, you should also be aware of the risks and other restrictions that come with these loans.
For example, the loan proceeds can be used to acquire land, make leasehold improvements, buy equipment, and purchase raw materials. It can also be used to purchase existing buildings, renovate them, or lease up to 49 square feet of rentable space.
Tax-exempt bonds
Tax-exempt bonds are bonds issued by the Mass. Development Finance Agency that are not taxable to the buyer. They may be purchased by banks, single lending institutions, nonprofit organizations, and other eligible entities. To learn more about tax-exempt bonds, read our frequently asked questions below.
Tax-exempt bonds are used for commercial real estate financing in Massachusetts. They offer low interest rates and can be sold in the capital markets or to financial institutions. Some of these bonds are structured as leases.
Office space availability
There’s a growing demand for office space in the Boston area, particularly in the Financial District. However, the market has been slow to recover from the recession. The vacancy rate ended 2013 at 9.6%, mostly attributed to professional businesses. High rents, however, have helped new development and relocations.
Commercial real estate investors should consider using SBA loans to purchase office space. These loans are available for a small down payment and have fixed interest rates. They can also be used to finance improvements to buildings. These loans are among the best ways to finance office space.
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