Bill Gagliano, chairman of the real estate practice at Ulmer & Berne, a law firm with offices in Cleveland, Cincinnati and Columbus, has good news for developers: He’s seeing more loan activity throughout much of Ohio.
And for those developers who are interested in building new apartment buildings? Gagliano has even better news.
“A lot of my work is in the development and construction of apartment buildings,” Gagliano said. “That is a big area right now. Those loans are being made today. Apartments have been a good, strong market even through the last three years.”
This doesn’t mean, of course, that developers in Ohio don’t face challenges. While banks are passing out more dollars today than they were during the height of the recession, they’re still not as willing to lend as they were during the boom days, Gagliano said.
“Banks are lending, but they are being very, very cautious and conservative in their requirements and in their underwriting,” Gagliano said. “The banks learned their lessons. Therefore, they are being cautious, even with the extremely strong borrower clients.”
These strong borrower clients, though, have always been able to get loans for their projects, even if they had to meet more stringent requirements to get them. As Gagliano says, the borrowers who have really struggled since the recession have been the borrowers who weren’t quite as perfect, or who approached lenders with projects that had location or other issues.
These borrowers have been largely shut out since the recession, Gagliano said. The good news? These borrowers, in Ohio and across the Midwest, are now starting to get financing, though it’s not easy.
“Even strong borrowers are facing tougher underwriting standards,” Gagliano said.
Gagliano sees other signs of a slow but steady recovery in Columbus, Cleveland and Cincinnati. He talks frequently with brokers throughout the state as way to keep tabs on the latest trends in commercial real estate.
These brokers have told Gagliano that they’re seeing more activity in their markets. Gagliano points to Colliers International as an example; the company is opening an office in Cleveland, a sign that this particular market has solid potential.
Aside from multi-family, brokers in some of the state’s biggest markets are especially bullish on the industrial sector, Gagliano said.
“Industrial activity seems to be up,” he said. “We are seeing more lease signings in the industrial market. Vacancies are falling here in Cleveland. And that’s true in Columbus, as well.”
Of course, times are still slow. Not all commercial sectors are enjoying particularly strong rebounds. Gagliano says that retail is mostly flat in Columbus, Cincinnati and Cleveland.
But Gagliano, like Glass, sees good things happening in the state’s biggest markets. He points to downtown Cleveland, with its new casino and Medical Mart & Convention Center, as a particularly good example. The construction taking place downtown has helped attracted more visitors to the area, he said. And that, in turn, can only mean good news for the retailers and office building owners in that region.
“These days, things could always be busier,” Gagliano said. “But things are definitely looking up.”
