Wichita commercial real estate market improves

The commercial real estate market in Wichita made gains during the past several months.

Commercial property managers witnessed a rise in market activity in the Wichita area in recent months, according to The Wichita Eagle.

The loan level for commercial real estate properties rose to more than $9 billion during the first six months of this year. This was still down from the same period in 2008, when it reached $13.5 billion, as well as the $9.5 billion achieved during the first half of last year, the newspaper explained, citing information from the Kansas City Federal Reserve Bank.

Despite the slight decline year-over-year, the 10th district, which includes not only Kansas, but also Colorado, Wyoming, Nebraska, Oklahoma and parts of Missouri and New Mexico, experienced an improvement. The newspaper said the first half of this year had a total loan level of more than $63 billion, which was markedly higher than the same six months last year, as that figure was $59.6 billion. It is still far off from the first six months of 2008, which had a loan total of $72 billion.

"We're seeing a bit of an uptick maybe in activity, but a lot of the activity revolves around the smart borrower looking to benefit from the low interest rate environment," Brent Beckman, Wichita market president of Union State Bank, told the news source.

Interest builds in local markets
While the level of purchases and loans in the Kansas market didn't increase significantly in recent months, many industry members feel the investor interest and financing is there. The newspaper interviewed one commercial real estate developer who said several lenders were interested in helping out with a financing plan for a high-end development.

This was not the theme in the area for the past few years, the news source noted. Competition for property loans increased in the past several months, and much of this may be due to financial institutions reaching solid ground with an interest to increase financing levels.

The continued interest and competition from financial institutions to get involved in the commercial market also helped improve the interest rates for those purchasing or financing properties, the news source added.

"It has provided some really good debt financing in the market," Chad Stafford, president of Occidental Management, told the news source. "There's a lot more options in the market today."

The continued improvements recorded in secondary and tertiary markets may show the wider commercial real estate market made gains in recent months.

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