Welcome to the World of Commercial Real Estate Finance

Until a month ago, I knew nothing about commercial real estate. In fact, when someone mentioned real estate, I only thought about home sells. Like most people, I drive past retail centers, industrial parks, office complexes, and apartments complexes every day. I never wondered how commercial buildings are financed.

At first, I questioned the real benefit of the school. Like I said, residential real estate is the industry I was familiar with. If commercial real estate was so important, why hadn’t I heard of it; and why isn’t it being taught in college. When I attended school, I knew I wanted to be in management someday, so I majored in Business with a concentration in Management. I had never heard of Finance with a concentration in Commercial Real Estate major.

Welcome to opportunity!

That said, I was taught to make informed decisions. So, I did some research to learn more; and I am happy I did! My research showed the vast potential of the commercial real estate industry. I learned that volatile markets do not have the same negative impact on commercial real estate as they can on residential real estate.

Residential mortgages are generally made on a long-term basis, but most commercial mortgages are short-term, which means they must be refinance every 3, 5, or 10-years. So, no matter what’s happening in the economy, there are always commercial properties that require financing.

What I’ll Learn

The 20-lesson course features practical animated presentations designed by industry professionals, real-world case studies, immersive interactive learning scenarios, and downloadable reference material. Additionally, the course creates a career path for anyone looking to pursue a career in commercial real estate finance.

“There is an extremely high demand for well-educated commercial real estate mortgage brokers. I’m glad this course is here to help me advance my career.”

~ Student

Get certified in commercial real estate finance today.

This may be a good time to invest in real estate.

The following represents Pioneer Realty Capital’s opinion on Victoria Rock’s “Despite Rising Interest Rates, Real Estate Offers Opportunity to Investors” article.

Overall, we agree commercial real estate holds greater investment opportunities than the stock and bond markets. As Victoria noted; “Real estate investment products can offer superior risk-adjusted returns. Lower volatility is another advantage. Given generally low, or even negative correlations with stocks and bonds, real estate can also provide diversification.” While flexibility exists in both the stock and bond markets, the stock market’s volatility and the bond markets minimal yield drives investors towards the favorable returns found with commercial real estate. It is difficult to match the consistently high income returns offered by the commercial real estate market.

Although interest rates are slowly rising, we are still in a historically low interest-rate environment. The 10-year treasury is currently at 2.89%. In our opinion, typically the spread necessary to begin questioning the viability of investing in commercial real estate investments is 8.60%. Market research of historic treasury highs and lows show the treasury reached its highest point of 15.80% in 1981 and its lowest point of 1.45% in 2016. Our clients are typically looking for greater than 10% returns. We believe that when the cost of capital exceeds the median of 8.60%, it does not make financial sense to pursue commercial real estate.

Good for another 10 years.

With current interest rates well below the median, there is still room for profitability associated with commercial real estate transactions. When the margins begin to diminish and interest rates near the median, commercial real estate will become a questionable investment. Based on historical trends, we don’t anticipate interest rates exceeding the median for another 10 years.

Finally, commercial real estate values have been trending up since 2000, with the exception of the downtrend from Q3 of 2007 – Q2 of 2010. Pioneer agrees with Victoria’s statement of the changes associated with commercial real estate trends. Multi-family apartment trends are a great example of this. Multi-family has outperformed every asset class consistently over the last 8 years with no signs of slowing. The population has shifted from owning to now renting residential apartments long-term. Industrial properties have also shown strong performance over the past 6 years. Due to e-commerce, the increase in demand of next-day delivery pushes industrial properties closer to urban centers. Year-over-year rent growth and historically low vacancies in the industrial industry have also fueled this growth.

While people have mentioned that retail is hurting, this is not entirely true. Grocery-anchored shopping centers is increasing among investors. Consumers have remained loyal to their local grocery stores. Retail strips centered around service providers such as nail salons, barbers, and various other segments have remained in high demand. However, Amazon and other e-commerce sources have impacted Sears and various other big-box retail tenants. These once “big-box” tenant spaces are now being divided and leased to various wholesale retailers such as Goodwill and Belk.

In conclusion, the commercial real estate market will continue to be appealing to investors even as interest rates slowly rise. The monetary rewards for the investor who pursues commercial real estate outweigh the stock and bond markets. So, the common phrase “you don’t get hurt owning dirt” still holds true.

“Important Note: Pioneer Realty Capital’s opinions are not meant to be viewed as investment advice or a solicitation for investment.”

Learn commercial real estate finance and start a career in an evergrowing market.

Welcome to the School Of Commercial Mortgage Banking

ARLINGTON, Texas, Aug. 7, 2018 /PRNewswire/ — Introducing the Pioneer Realty Capital School of Commercial Mortgage Banking. This first of its kind school is designed to introduce its students to the world of commercial real estate finance. It provides a learning path for those seeking a career in commercial real estate. Students learn how to originate a commercial real estate loan request, underwriting, valuation techniques, and how to identify and submit loan requests to the capital markets.

Start small. Think Big.

This course is designed to introduce you to the world of commercial real estate finance. Knowledge of this industry can lead to a very lucrative career as a commercial mortgage banker. Or, if you currently work in real estate as a sales agent or residential mortgage broker, knowledge of this industry, and more importantly the understanding of commercial real estate finance, can greatly advance your career.

This online school is entirely self-paced, and students can enjoy the convenience of online learning by accessing the training portal from anywhere with internet access. The system supports many web enabled devices. Successful students will earn a designation as a CRE Mortgage Broker, and have an opportunity to join the PRC Broker Network.

About the PRC School of Commercial Real Estate Finance

The Pioneer Realty Capital School of Commercial Real Estate Finance introduces students to the other side of the real estate industry. Students are presented with a brief overview of the capital markets as it relates to commercial real estate finance, basic CRE underwriting techniques, the various property types and loan programs available for closing commercial real estate transactions. The course concludes with two capstone lessons that require students to prepare a loan request package for submittal to the capital markets. Students who complete the program earn a designation as a certified CRE Broker, and have an opportunity to join the PRC Broker Network.

As a member of the PRC Broker Network, brokers will be able to process loan requests through the Pioneer Realty Capital Broker Network portal. PRC brokers can to download researched, qualified leads, and submit loan requests through the PRC Broker portal providing access to a network of more than 790 capital partners. Additionally, members receive underwriting, loan administration, and back-office support to make sure deals close and fund on-time.

“We are very excited about the launch of our school. As industry professionals age out and transition into retirement, there is an opportunity for well-trained commercial real estate finance professionals to replace them.”

Charles Williams, MBA, EA., and Managing Member – PRC CREF School, LLC

Get certified in commercial real estate finance today.