Chad Hyland, associate vice president in the Cincinnati office of Bellwether Enterprise, has more than 10 years of experience in commercial real estate finance. He’s also a proud resident of the Cincinnati area, having earned his bachelor’s degree from the University of Cincinnati. Midwest Real Estate News asked Hyland three big questions about Cincinnati’s real estate market. Here’s what he had to say.
How strong is the Cincinnati commercial real estate market today? Are you still seeing plenty of commercial financing requests? If you are, what are some of the factors fueling this strong market?
Chad Hyland: The market is very strong. Based purely on occupancy, multifamily is running more than 94 percent (regardless of class type), industrial is running more than 95 percent and overall office is running more than 91 percent. There is certainly no shortage of capital, both debt and equity. Even in the Midwest, there is plenty of coastal and even international capital being deployed here chasing returns that can’t be found in larger, more metropolitan markets.
As for financing requests, our producers are as busy as ever. Bellwether Enterprise focuses on the permanent, non-recourse end of the commercial real estate financing spectrum, but we’ve also been fielding a lot more construction and rehab requests as an alternative to banks. The persistent low-interest rate environment continues to bode well for our clients who want to fix their low rate for a longer term.
What attracts companies to Cincinnati? What would you say makes Cincinnati an attractive place in which to do business?
Hyland: We have more than 2.1 million residents (29th largest MSA). There are currently eight Fortune 500 companies based in greater Cincinnati, which places us in the top five of U.S. cities in terms of Fortune 500 companies per capita. GE Aviation, which is performing quite well, is based here, too.
Additionally, given our one-day drive to two-thirds of the U.S. population, we are a logistical juggernaut. Our industrial market’s square footage is within the top 15 of the country. This has attracted Amazon to develop a $1.5 billion, 2.9-million-square-foot Prime Air Hub at our airport (although I’m sure tax incentives didn’t hurt, either). The sheer size of this project is difficult to comprehend, but the local impact of it will certainly be substantial. Simply put, other companies want to be a part of this diverse machine.
Overall, our local economy is a function of and contributor to an intelligent, skilled employment base. Cincinnati has good schools, is very family-oriented and affordable and you can be anywhere within 20 minutes. We have world-class restaurants and entertainment, including three major league sports teams. I could go on and on, but maybe it all just boils down to our Cincinnati-style chili!
When Bellwether looks at commercial financing requests, what factors does it consider before approving that request?
Hyland: The actual real estate and economics of the transaction are always at play, but equally important is who is behind the deal and what they have planned for the project. Once we have a good feel for the team and their goals, we can determine whether an opportunity is a good fit.
Obviously, we want to process the transaction, but if we can’t, we also like to help the client find someone who can. I believe this mentality, along with a good sense of humor, has led to the success of our office. We are the largest source of agency financing in the region, as well as the state of Ohio, which says a lot. We have a vast source of lending relationships for all types of products, both locally and nationally, and we’re always happy to get the conversation started.