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Medical Industry Keeps San Antonio Commercial Real Estate Market Afloat

Posted by VIP Realty on Tuesday, June 8th, 2010 at 5:21pm.

The San Antonio commercial real estate market, despite the upward momentum of the residential real estate market, is still struggling through the foreclosure mess. Unfortunately, the San Antonio commercial real estate market still makes up a large section of the San Antonio economy.

Where are the New Commercial Construction Projects?

Because the San Antonio commercial real estate market continues to decline due to the number of foreclosures, the number of new commercial construction projects continues to struggle. However, amidst all of the problems surrounding the slow rate of new commercial construction projects and the tight lending standards that have inhibited builders from starting new construction jobs, the medical industry has come to save the day.

Medical Industry comes to the Rescue

The $16 billion-a-year medical industry, which makes up a good portion of San Antonio’s economy, has allowed many commercial construction projects to move ahead, despite the tight lending environment. The reason for this may lie with the fact that most lenders see the medical industry in the San Antonio commercial real estate market to be quite low risk. In fact, many lenders view construction for the medical industry to be less risky than other publicly funded projects. Even with lenders turning a deaf ear to new commercial construction projects, doctors and developers have been able to make deals with the lenders to build necessary medical space. It doesn’t hurt, either, that most doctors have great credit.

The Medical Industry gets the Green Light from Lenders

Many lenders in the San Antonio commercial real estate market are requiring builders and developers to have minimum occupancy and equity requirements for new projects; however, if doctors have tenants lined up, lenders seem willing to let these requirements pass. In addition to giving the green light for medical industry construction, lenders have also begun to offer very attractive and competitive loans. As a result, the health care industry in the San Antonio commercial real estate market continues to grow, even as the commercial real estate industry otherwise continues to struggle. In addition, the nation expects that under Obama’s new healthcare legislation millions more people will be able to obtain health insurance, thereby increasing the need for new medial space.

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