Many commercial real estate purchases in San Francisco and throughout the county rely on a business’s ability to secure a loan through the Small Business Administration (SBA).  This re-post of Ken Hoover’s Business Times article explains that the SBA is working on a record number of loans for Fiscal 2013:

The Small Business Administration is processing loans again now that the government shutdown is over.

That’s good news for businesses such as TL Technologies Inc., a specialty manufacturer of precision metal components in Ephrata, Pa. That company’s $1.5 million SBA loan was held up by the government shutdown, forcing it to cancel delivery of two automated machine tools that it needs to fulfill a new contract. TL Technologies still hasn’t received this loan yet, but at least it knows it will get the loan soon and won’t lose the contract.

“I know it’s coming, so it’s just a matter of time now,” said Chris Leh, president and co-founder of TL Technologies Inc.

Leh, who testified at a Senate hearing last week, is an example of how the government shutdown affected SBA lending. It inconvenienced hundreds of businesses whose loans were stuck in limbo, but it wasn’t devastating because it only lasted 11 business days.

Plus, many small businesses and their lenders saw the shutdown coming and rushed to get their loans processed by the SBA before Oct. 1, the day the shutdown began. Nearly $625 million in 7(a) loans — the SBA’s flagship program — were approved in the three days leading up to the shutdown. For September as a whole, more than $2.4 billion in 7(a) loans were approved — that’s nearly $1 billion more than were approved in August.

Lenders worked “nights and weekends” to get their loans to the SBA before the shutdown hit, said Tony Wilkinson, president of the National Association of Government Guaranteed Lenders. Most of these loans came from preferred lenders, who are authorized to approve SBA-guaranteed loans on their own. These loans could be processed quickly, because all they needed was a loan number from the SBA.

The agency began working Thursday on a backlog of about 700 7(a) loans totaling $140 million that were submitted during the government shutdown.

That’s a relatively light volume of loans — last October, for example, more than $378 million worth of 7(a) loans were approved in the first two weeks of the month.

Many SBA loans that otherwise would have been approved in October were instead moved up into September in order to avoid getting caught in the shutdown.

SBA lenders know how to play this game — there always is a rush to the bank whenever it appears there might be a shortfall in funding for SBA loans or changes that make these loans less attractive. In fiscal 2011, for example, $12 billion in 7(a) loans were approved in the first quarter alone, because lenders and borrowers wanted to take advantage of loan breaks — lower fees and higher government guarantees — that were about to expire. This huge quarter led to a record-breaking year for SBA lending.

The push for loans at the end of September contributed to another strong year for SBA lending. Through Sept. 30, the end of the government’s fiscal year, nearly $17.9 billion in 7(a) loans had been approved for more than 46,000 small businesses. That’s not the final number for the year, just gross approvals, because some prospective borrowers will decide not to take the loans. Still, that’s a big jump from the $15.2 billion in 7(a) loans that were approved in fiscal 2012.

SBA loans remain a popular source of long-term loans for small businesses — so popular that lenders work around the clock when they see a shutdown coming.

Source: SBA Loans flowing again, but big rush came before government shutdown

The San Francisco Commercial Real Estate Marketplace is diverse, dynamic and complex.  While the City and County of San Francisco is confined to an area of only 49 square miles, the Commercial Real Estate Market is divided into multiple submarkets consisting of dizzying layers of zoning laws, height limits, and special use districts.  These zoning laws not only dictate development projects, but determine what types of businesses can go where.  Therefore, it is critical to understand where your business can go, before you get your heart set on operating your industrial manufacturing plant in Jackson Square.  Obtaining brokerage services, like those offered at Calco Commercial Real Estate, can help any entrepreneur, expanding or relocating business, decipher the zoning code and develop an effective tenancy strategy.

 

Like-kind commercial real estate in San Francisco tends to be clustered together.  For instance the Bayshore/Bayview, and India Basin submarkets tend to be heavy industrial in nature, thereby housing the majority of warehouse in the City.  Conversely, the Financial District primarily offers office and retail space.  There are Mixed-Use Districts located in various neighborhoods such as the South of Market Area (SOMA), Potrero Hill/Dogpatch and Mission District.  However, just when you think your use might be perfect for a specific neighborhood, an individual building may be designated as a “historical landmark,” with a host of other uses/restrictions.  Once again, retaining a commercial real estate broker specializing in the San Francisco market can help determine the best location for your specific business.

                                

Once a few neighborhoods/zones have been identified for the ideal location of your business, it is next critical to note that not all commercial real estate is priced equally in San Francisco.  Two buildings similar in construction, amenities and condition will vary greatly in price depending on the neighborhood (much like the residential market).  When it comes to pricing, it’s best to remember the old cliché about the three most important factors of real estate:  location, location & location.  While location is not the only factor affecting price, it is a key component.  Other elements that affect commercial real estate pricing in San Francisco include:  condition, parking availability, close proximity to public transit, amenities, absorption & vacancy rates, ADA and seismic compliance, etc. 

 

As a Tenant, it is imperative to hire a commercial real estate broker who can help negotiate a fair price, improvement packages, and early occupancy opportunities.  Another huge advantage for Tenants: typically the Landlord pays for any commissions earned by a lease transaction.  Therefore, a Tenant can utilize a broker with little to no financial responsibility.  Lastly, seasoned brokerage firms, such as Calco Commercial, have a direct pulse to the marketplace and understanding of available properties and even off-market opportunities.   As a Landlord, using a brokerage firm can streamline the leasing process, lower vacancy periods, increase visibility, and ultimately create higher revenue streams for commercial property assets.   And, Landlord’s only pay commissions on completed transactions!  So, as a Landlord, why not let a broker professionally market a space and complete all the leg work on your behalf?  The San Francisco commercial real estate marketplace can be a daunting place to enter, but Calco Commercial can simplify the process while offering definitive results. 

 

For more in depth market information, contact the Calco Commercial office at 415.970.0000. 

Calco Commercial leased 36,000+/- square feet of warehouse/commercial space located at 301 Toland Street in San Francisco.  This unit is part of a larger 108,668+/- square foot building with a 19,230+/- square foot unit remaining available for lease.  For more information, click here:  301 Toland

Over the last six months, Calco Commercial has completed nearly a dozen lease transactions at the 2200 Jerrold Avenue Complex in San Francisco.  With the leasing of the remaining unit (3,200+/- sf.), the 97,000+/- square foot commercial complex is fully leased.   To view our other commercial real estate listings, click here:  https://calcosf.com/properties

The San Francisco Business times reported today that both manufacturing activity and construction spending has increased for the third month in a row. 

http://www.bizjournals.com/sanfrancisco/news/news-wire/2013/09/03/economy-picking-up-manufacturing.html

With the leasing of 41 Dorman to Komater Electric, Calco Commercial has leased nearly all of the 410,000+/- square foot multi-tenant complex.   Only the 13,252+/- single identity corner building located 2121 Oakdale Avenue remains available (2121 Oakdale).

The Valhalla Industrial Complex is the #1 Industrial Park ion San Francisco consisting of all concrete, open span, and functionally designed light industrial and office spaces.