Commercial Lending Success and News Commentary for January 2020

Good morning to longer days and shorter nights;

May the season of rain continue, our aquifers be recharged, and our lakes be filled with water.

Wrapping up 2019: Our overall economy continues to enjoy an excellent year. Help wanted signs abound, starting pay is better than ever, interest rates remain advantageous to investors, and stock and retirement portfolios are the best ever. What’s not to like ?

What to watch in 2020: Unintended consequences.

Rent control is one such an event. Instead of helping housing, it actually leads to fewer available rentals. Politics of ideology vs the pragmatic realities of supply and demand.

Another is the emotional game of minimum wage standards, along with the negative impact of W-2 vs 1099 employee – Bill AB 5. For both, the assumption – without evidence – is small businesses can: absorb the added expense, remain profitable, not cut employee hours, and remain open for business. History says unlikely, while the politics of big money say, we don’t care. Look for softening in smaller retail centers and small scale commercial operations.

Here we go again. The more government wants to control, the more those intended to better serve, are instead worse off. Be wary of the one-government / one party solution.

Love to time the market? Today’s rates make now awonderful window of opportunity to:

Refinance your ballon loan today – Lower operating expenses

Let’s begin saving you money and adding cash to your balance sheet – CallToday.

As you can tell, my approach is straightforward – based in meaningful data, not pointless facts. We complete the job – without headaches to you. Our thinking is bold in searching out what best fits your lending needs. We follow a disciplined plan of reviewing and executing a proven strategy of success. Our strength is gathering relevant data, focusing on differing loan programs, and executing a timely close. We call this the WIN Strategy – a proven path to financial success, that is safe, secure, and provides long-term success. Can I be of help to you?

Market News:

  • Rents and NOI: Both increasing. MHC shows strong rent growth, as the marketplace continues seeking more housing. Most rental increases are showing signs of stability. Nationwide, annual rent increases, for SFR, it is running about + 3 %. Good and stable.
  • Cap Rates: Steady as she goes. Another fabulous year to celebrate.
  • Jobs: Not too much can be said, other than ‘WhooHoo’ ! Another year of growth. Will the bears be right? Best news: Fears of a 2019 recession proved to be “fake news.” And now, calls for a 2020 election-year recession, are disappearing.
  • Federal Reserve: Projections: A year ago, six Fed members saw short-term rates ending 2019 up by three-quarters of a point, 5 members saw them rising by half a point, 4 members by a quarter-point, and two members saw no change. In the end, the Fed lowered rates by three-quarters of a point. For what it’s worth, 13 Fed members see no rate change in 2020, while four see rates rising by a quarter-point.
  • Retail: Nationwide more retailers filed BK in the 1st half of 2019, than all of 2018. Exceptions are high-end malls – Valley Fair and Santana Row.
  • Commercial: Office vacancy from 25 % in 2009 to 7.4 % today.  Today 7.7 M sf of new construction – with 75 % pre-leased. Warehouse vacancy is 1.7 %, Industrial 2.7 %.
  • Santa Clara County Assessed Valuations: Assessed values just passed 1/2 T. 20 B of the change is due to sales. Of this, new construction is only 30 %.

Call us. We are here ready help, we have the data, and now is the best of times.

Success Stories

Growth, expansion, and the fun of trading, are all doing great!

Last Saturday we held our latest “Tax Deferral and Avoidance Strategies for Highly Appreciated Assets.” If you missed us, give us a call. We gladly meet with our clients. We see planning to be about: risk, retention, taxes, and estate building. Our conversation is about sharing multiple methods and strategies to achieve this. History proves the wealthy build wealth, through planning, knowledge, and team work. We are here to provide you all three. Call today and let’s begin wealth building today.

The Good News:

We specialize in small-balance commercial loans:

SBA, Agriculture, Small commercial properties.

It is a steady part of our 2019 work, expecting more this year.

Let’s talk today to help your today and tomorrow, become your best ever.

While most commercial real estate deals are straight forward, it is good to recognize that not all are glazed donuts, with sprinkles. Most move smoothly and some can be entertaining. Yet as expected, for a few, lenders find difficulties to overcome. The good news: We never quit and your success is our goal, from the first step, to close of escrow, and beyond.

Summarizing

Bottom Line: What I do: 1) Accurately source the Lender looking for your specific profile  2) Assemble a complete data package for your submission. Call: Let’s talk. Let’s get more for your dollar, today.

Where are you? If Buying, we provide the financing to carry you through. If Selling, we have multiple ways of delaying and deferring Capital Gains taxes. If you are seeking to re-structure from a short-term sweat equity buildout to a long-term hold, call us. We hear you and are ready to help. I am speaking regarding Capital Gains deferral and avoidance strategies again January 18th. If you have an interest, reach out and I will get an invite out to you.

Benefits: We help our clients / investors achieve; improved cash flow, increased potential for future rental increases, and good budgeting of major expenses. We believe in investing in real estate – a quality asset for a diversified portfolio.

Good News: Our many lending partners are ready to write – today – traditional commercial loans, without surprises. Even more: Many of our lenders offer terms beyond the common 10-year term. Learn more – Call today.

Keys to Your Success

Upfront planning, good preparation, and quality data. From here, we build a solid, strong loan request, one anticipating lender questions. Good New: We know the how, what, why’s and this is key to our being a value team player in your investment mode. Let’s talk.

New to Commercial Lending?

For years, new people coming into the marketplace, finding our commentary insightful. They appreciate both our straight forward plan-of-action and ability to provide a quick review. Thank you again for your business – and your referrals – as I look forward to talking with you.

If you or someone you know, is considering investing in real estate for the first time, please call. This first call is a great way to address concerns, questions, and possibilities.

You have heard me say it before:

It all starts with our first conversation.

Let’s talk today.

Many blessings for family and friends.

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