| Fueled by a strong economy and still favorable interest rates, the local banking industry continues to see great demand in commercial loans. In February alone, about $62 million in commercial loans were made in the county, according to figures provided by Brett Jorgenson, Senior VP/Chief Lending Officer for Kitsap Credit Union.
Construction and real estate loans are especially in strong demand, local bankers say. Kitsap Bank, for example, had one of the highest loan production periods last year, and this year so far has been to a very good start. The bank is currently at a $72 million outstanding construction loan balance, a 28 percent increase compared to the previous year.
“There is a lot of new construction going on throughout the county,” said Steve Politakis, Executive Vice President and Chief Credit Officer at Kitsap Bank. One of the reasons for the healthy pace in projects, both residential and commercial, is because prices are more attractive in this area than along the Interstate-5 corridor, he said. There is more interest in the South Kitsap market as well due to the high prices in Gig Harbor.
“Over the past year, our bank has seen the most demand in commercial and residential building developments including condos and retail spaces,” said Steve Touger, American Marine Bank’s VP Commercial Real Estate Lending. “For businesses, short and long-term financing demand seems to be steady.”
There is a good mix of commercial real estate projects, including residential development, retail space, office and industrial. Banks are also financing a variety of existing property sales such as strip malls and rentals. The activity is spread out across the county, although Bremerton remains notably one of the busiest areas, as the downtown revitalization process continues to boost construction activity in the city.
The medical industry also appears to be on the move toward faster growth. “A lot of professional people are expanding into Silverdale, with new construction of medical facilities,” said Linda Smith, Kitsap Bank Senior Vice President and Credit Administrator.
Banking industry representatives seem to agree that as long as interest rates don’t go up a lot, they remain favorable and the loan demand will continue strong. The bigger challenge, however, is in the shortage of buildable lots, a complaint that developers and Realtors have maintained for a few years is due to the limitations imposed by the Growth Management Act.
“The biggest challenge we find is availability of commercial property due to zoning,” Jorgenson said.
Touger agrees. “In commercial and residential real estate, the difficulty of finding suitable land is an increasing concern to investors and builders in Kitsap County,” he said. “For residential projects, demand for housing continues in Kitsap County, with land availability being the biggest stumbling block.”. |
