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The commercial real estate market is undergoing significant transformation heading into 2024. Construction and commercial real estate professionals are seeing a slight slowdown in new projects and transaction volumes due to the impact of rising capital costs, inflationary pressures, and talent shortages. In this changing market, commercial real estate developers must seek ways to mitigate the effects of market uncertainty and volatility.
Eric Stoll, vice president of commercial services at Advia Credit Union;
While demand for high-quality Class A space remains strong, the lack of available capital for new office projects has led to increased interest in second-generation office space. This hesitation to commit to new projects is reflected in a slight decline in new design contracts in April 2024 (AIA). The office market is also facing a range of challenges, primarily due to the shift to remote and hybrid work environments. Commercial real estate owners are having to adapt and optimize their capital structures to mitigate the impact of rising capital costs by accessing alternative funding sources or exploring refinancing options.
Advia Credit Union's commercial services team provides guidance on financial strategies to strengthen cash flow, manage capital, and improve overall financial performance, which can be extremely helpful during volatile times. “Advia's adaptability and ability to handle complex industrial transactions has been impressive,” says John Francis of Francis Realty (Grand Rapids, MI). “What has particularly impressed us is our relationship with Commercial Services Manager Chris Schneider — his confidence in our projects, his advice, and his recommendations. Every transaction requires a level of expertise. Each transaction has its own nuances, and Advia understands not only the nuts and bolts of the specific transaction, but also the overall vision.”
Advia’s commercial services team has a proven track record in advising clients, protecting their investments and providing solutions to overcome market challenges, developing tailored solutions whilst addressing clients’ long-term financial strategies.
“It's funny how my long-term relationship has eventually evolved into a friendship. John and I began working together about eight years ago, focusing on terms and rates to get the best return on investment for John and his partners. At the end of the day, it's our deep understanding of John's portfolio and the market, and our confidence that John can successfully execute projects, that helps us secure the best financing options,” said Chris Schneider, Commercial Services Manager.
In this complex and volatile market, Advia's commercial services team stands out with its deep understanding of these impactful changes. Advia is a knowledgeable partner providing strategic insights and innovative financial solutions tailored to the unique needs of the commercial real estate markets we serve. We offer more than just loans; we provide a partnership that navigates the complexities of the commercial real estate market, helping businesses adapt, grow and thrive in an ever-changing environment.
As we head into 2024, business owners, entrepreneurs and investors need financial partners that are innovative, flexible and deeply invested in their customers' success. Advia's strategic lending solutions help companies realize their full potential, drive economic growth and build resilience for the future. By focusing on the unique needs of each client and fostering long-term partnerships, we help companies navigate the complexities of today's financial environment and achieve lasting success.
Ready to unlock the potential of your business? Visit adviacu.org/commercial to learn more and get started.
About the Author
Eric played a pivotal role in driving the growth and leadership of the commercial services and branch teams and successfully integrated the two commercial banks since joining Advia in 2017. During his tenure at Advia, the commercial loan portfolio achieved strong annual growth of 31.3% and expanded footprint in the northeastern Illinois and southeastern Wisconsin markets.