Commercial Mortgages in Arizona

Commercial Corner, Market Update

Rocke Andrews

Rocke Andrews
President, National Association of Mortgage Brokers


Commercial mortgages in Arizona avoided much of the publicity and outcry of their residential brethren. However, it was clear to see plenty of retail and office properties were vacant and for sale. Smaller sites as well as the larger malls experienced disappearing occupants and missed payments. Many small business owners opted for the strategic or no choice default. Those that were able to fight their way through the downturn, are just now or recently having to refinance their 5-7 year commercial loans.

SBA loans remain their best choice and are now more readily available, often up to a 90 percent loan to value. The biggest impediment here is value, as they have not necessarily regained their prior form. Owners are having to pay down balances in order to secure a new loan.

As always the various slices of the market have been affected differently. The last several years have seen good performance in hotel and apartment properties due to the many previous homeowners who were forced to rent. The warehouse industrial, performed less attractively with the retail and office sector experiencing the hardest hit to find financing.

During the economic downturn of the last 6-7 years commercial loans virtually disappeared from the Arizona market. The larger federal depositories indicated they were lending, but applicants found they were only willing to lend to those that didn’t need the funds – in actuality applicants were told to use their own money. The last 12 months has finally experienced more relaxed lending requirements resulting in some investors returning to Arizona.

Private investors have been available for the last year or so and now some institutional lenders, as well as regional banks, are returning to the market. Hedge funds are setting up commercial financing for rehabbers and collectors of residential property renters. The hedge funds originally bought these properties themselves and as the prices increased became lenders on them.

Commercial bank lending is still fairly conservative; however, it is slowly returning to pre-recession levels. For individuals looking for small business property financing, the best starting point is your business bank. Most business banks cater to SBA loans and will be more familiar with you and your business. Next or in addition to a business bank, check with a small commercial broker. Typically, loan amounts over $250,000 yield the most options. Smaller loan amounts will result in higher rates, higher fees and less investor interest. Multifamily and residential commercial is readily available down to about $100,000 or even lower than that amount. Most often the best option with multifamily and residential is a broker versus a bank – unless there is a longstanding relationship in place with the bank.

Commercial lending in Arizona is consistently improving and on a trajectory to return to earlier levels. As long as consumer confidence keeps growing as well as the job market, commercial real estate will follow that growth as well.


Rocke served on the National Association of Mortgage Brokers Education Committee in 2009, and was elected to the board of directors in 2012. Rocke can be reached at or at 520-886-7283.


Commercial 360° Seminar

FRIDAY, MAY 27, 2016  –  9:00 AM TO 12:30 PM


This seminar is for anyone wanting to learn about growth and development in Arizona.

Learn from industry leaders regarding Arizona and Salt River Pima economic development, land availability, trust land funds, energy and water plans as well as a current market update – hear how all these factors effect the state’s growth and the real estate industry. Tempe Mayor Mark Mitchell will also provide some detail on how projects in Tempe are creating a positive influence for the state of Arizona.

Register Now

Tuition: $40

Credit: 3 hrs. Legal Issues