February 2022 Commercial Lending News and Successes

Good morning to Springtime and hope for rain;

Back to Business – Commercial Investing

Stay Strong – Be of Great Courage – Be Prepared

Take Full Advantage of Great Rates – Today!!

New Year – New Dynamics “Shock and awe” of the Federal Reserve – Jumping Rates. More troublesome: Jumping rates and reducing their balance sheet, at the same time. All this in the face of an already slowing economy, with liquidity an issue. Democrat spending coming home to roost. 

Clearly, there are too many dynamics to predict outcomes, so good not to over-react. Let’s wait and see what actually takes place – people do have a voice. Until then, talking heads will continue to speculate all kinds of outcomes.  Key for decision makers: Timing and preparations. Let’s start now. Call today. 

Other News: Gap between 10 Yr & 2 Yr continues to narrow. Latest differential is a mere 0.4 %. 

While residential mortgage rates are up 1 %, – still very good, a good indicator for commercial loans – the 5 year Treasury – is up about 1/2 %. Worthy of watching: The 5, 7, and 10 year notes are all tracking within basis points of each other. One may wonder what the Fed is watching before acting. 

Call with questions, as these challenging times require patience, careful review, and good preparation. 

Call to Action – Bad News and Good News

The Bad News:

Commercial markets: No clear signals. Cap rates are holding steady. Different product classes and different locales are performing as if independent stages. A true “muddling-through” time period.

With this, CoVid language and restrictions continues to dominate the static position in the market. Without change, the dynamic of employers working in-house vs work-from-home will remain unclear. 

The Good News:

Outlook: 2022 remains positive. New businesses continue to form, with even more re-openings. A lifting of mandates will help, but progress should continue, regardless. Fed are you noticing?

Office Rents: In spite of office vacancies and the unknowns of “work-from-home”, office rents post a healthy rebound from the 2020 CoVid shellacking. Add to this, strong increases in apartment rents and things are looking much better – better cashflow and P & L statements. Things are improving. 

More Good News: Short supply in housing, provides for strong price-support levels for home prices and apartment rents. This post CoVid rebalancing of value and pricing, is good for investors, and perhaps a reality check for those seeking. At the same time, housing supply issues is a multi-decade problem that is complex and not easily or quickly solved. 

Suggestion: In these uncertain times, look for more “Bridge-lending” this year – and next. It is a great lending option, when traditional commercial underwriting falls short.  Let’s Talk Now.

SBA LENDING: Full Steam Ahead

1) SBA lending continues full steam, 2) Refinance window has re-opened, and 3) some rates on buildings, starting in the 2’s % !!

Call Today! – Don’t Delay!

Suggestion: Do all you can for your local Small Business.

One cannot repeat this enough. WE need them.

Market News

Jobs: Hot numbers or not?  The BLS jobs report read as a strong economy.  Not as hot as the headlines stated.  Work week actually dropped 0.3 %. This equates to a loss of 350,000 jobs. What about what is called an excellent job revisions? Understand, the “special” January adjustment resulted from Census Bureau estimates for US population.  This population adjustment nearly fully explains this January upward revision. If not, we would have seen a 272,000 drop in civilian employment,  plus a 137,000 decline in the labor force.  Quite different from MSM headlines. Federal Reserve, we investors are hoping you are relying on the truth behind the numbers, not looking for an excuse to jump rates. 

Economy: Before the pandemic, on-line sales accounted for about 14.25% of all retail sales. During the lockdown of March/April 2020, the percentage unsurprisingly jumped to 20.2%. Since then, it has steadily fallen to 16.5% by 6/20, 15.9% by 3/21, and 14.9% through 12/21. The current on-line sales level is now below what the pre-covid growth trend would have suggested. Good News: Writing obituaries for brick-and-mortar stores is quite premature. Fed – please don’t stop this recovery.

Commercial Refinances: Over the past year, Office Vacancies are holding flat. Good News: After a vacancy jump to 13 – 15%, due to governmental response to CoVid. Good News: We are seeing signs of financial recovery in this sector, regardless CoVid weakening P&L’s.  More Good News: Lenders are still financing. They are funding projects. Kicker: They are more diligent in the quality and detail of the paperwork. Here is where I can help. Let’s talk. Let’s start the “prep” work today. 

Bottom Line: These Great Rates are Key for Continued Sound Investing. These low rates offer unique opportunities to: 1) Secure solid financing, 2) Modify one’s commercial investment portfolio, even an exchange to defer taxes, 3) Strengthen the balance sheet, and 4) Increase net cash. 

If you are ready, then let’s get going. Let’s talk today.

We know the paper work, the process, and how they think

Projects in the Works:

 Franchise Financing: For new people entering into new markets with proven franchises, we provide financing. It is available. This is the beauty of SBA-Financing and right up their alley.

 Business Sales: We continue to work diligently on a couple of small business loans – business being purchased and the of refinance of an existing businesses. Key: Strong post-Covid financials. .

 On-Edge Financing: Good News. Inquiries continue strong for both construction and those selling ways and strategies to avoid paying Capital Gains taxes. We offer proven and effective tools to keep your cash working for you today. When you consider the tax bill, lets talk first. Such is good stewardship for your hard earned estate. Have questions about differing taxes? Let’s talk. Information is your key and a needed first Step. Good things come from good preparation. Call today.

Summary

As a trained and proven broker: WE provide a needed ray of hope, in uncertain times. For our commercial clients: WE provide a straightforward, careful review of available lenders, with a full range of lending options. If you are ready, they are ready. Together we can make your investment dreams happen. It is an excellent pathway to success – uniting a strong, solid loan application, with interest rates to good to pass up. We are time-tested, with quality lenders ready to lend. Call today. 

TRUST THE PROFESSIONAL 

Trust the value and peace of getting your loan done – right.

Many blessings for family and friends.

Leave a Reply

Your email address will not be published.

*