Missouri developers hoping to obtain financing for a commercial property may experience some difficulties because of more stringent loan underwriting requirements and the sluggish economy. According to a Wells Fargo representative, slow economic growth for 2016 may have a negative impact on the amount of commercial real estate sales. As a result, there may be fewer lenders willing to fund risky real estate projects. In fact, by the end of 2015, which was the end of the six-year recovery in commercial property values, fewer commercial properties sold because of the increased number of qualifications for obtaining a loan.
The strength of the market for commercial real estate is dependent upon the ability of developers in Missouri and around the country to obtain funding for their projects. Changes in federal securities law may now allow real estate developers to attract financing through the use of crowdfunding platforms, and crowdfunding is also allowing more investors to participate as well.
The real estate boom and collapse in recent years may still be fresh in the minds of Missouri investors and business owners. However, 2015 was an excellent year in terms of commercial real estate profits. The factors contributing to a successful year included low numbers of vacancies accompanied by a high demand for properties, which worked well for those involved in this industry. Unfortunately, there is potential for a dramatic downturn in this industry in the next couple of years.
The achievement of Burgess Services, Inc. should inspire minority-owned companies in Missouri to take on big projects. By paying the high premiums for surety bonds and assuming 100 percent of the risk on the mechanical and plumbing construction of a 519-room airport hotel and transit center in Colorado, Burgess Services was awrded the $39.6 million construction contract in 2013. Taking on this risk meant that the company accepted responsibility for problems and failures that might result from its work.
While Missouri residents may be particularly familiar with the renowned Energizer Bunny, they might be surprised to learn that Duracell, a major competitor of Energizer, has allegedly used a similar pink bunny in its own advertising. Because of the supposed use of this feature in Duracell packaging appearing in U.S. retail locations in the latter half of 2015, Energizer has filed suit against Duracell and its former parent company.