Your August 2022 Commercial Lending Successes and News

Good morning to Summer – Vacations and Back to School for some;

Back to Business – Commercial Investing

Stay Strong – Be of Great Courage – Be Prepared

Take Full Advantage of Great Rates – Today!!

New Year – New Dynamics: Change is the constant. Spiking inflation – gas and food – explains the lowest personal savings rate since the pandemic. Why? DC-democrats over spending to look as if they cared. Then the Federal Reserve too worried about political, than fighting inflation. History repeats.

Other News – The Fed: Finally action on inflation. Yet, history shows the Federal Reserve Board is late to act and over reacts to what others already know. Their record is perfect. The question: How severe the recession? Do they understand “supply” maybe more the issue, than consumer demand?

Yet with high certainty, count on new Fed rate increases. Thus, now is the time to prepare and be ready for tomorrow. Good news: We are ready to help. Don’t get caught in D.C. swirl. Call now. 

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

Call to Action – Bad News and Less Bad News

The Bad News:

Stocks: Since the Great Depression, there have been 22 bear markets – a stock market decline of more than 20%. The average duration has been about a year. Since then, the shortest bear market was 2020, lasting but a month. The longest was the dot.com bear market. It lasted 30 months. 

Less Bad News:

The hidden, not yet quantified offshore supply of inventory awaiting in the LA and Long Beach ports. Such helps explain why the current Cass Freight index – shipment costs – is down, month-over-month. 

Inflation / Deflation/ Supply Side issues: Before Covid-19, cost-to-ship a 40ft container from Shanghai to Port of LA, was near $2,000. Soon after, shipping costs doubled to $4,000, through the first four months of 2021. Then they increased explosively, peaking in late 2021 to above $12,000. Since, price has steadily fallen to just below $7,000.

The unknown: Supply-side pricing of inflation. Consider ports of Los Angeles and Long Beach are at record highs for severe port congestion. There are a record 105 container ships waiting to berth outside LA/LB. Does this supply squeeze help explain why more and more companies are announcing layoff’s? Why 2nd Quarter start-up funding is off 40%. Why does the Fed ignore this important issue?

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.

Call Today! – Don’t Delay!

Property Valuations: With rising rates, average Loan-To-Value on properties, shows a drop. The drop for Commercial properties is 50 bps. For apartments, they are lower by 100 bps. Being a trailing indicator – reflecting last March to April timeframe – keep watch as to how these numbers trend. 

Work from Home: We are seeing the growth in ‘Third Places’. This is where employees are logging in from a 3rd place – office or home or now, a 3rd place. Such flex workplaces – coffee shops, hotel lounges and co-working – are posting large gains of 8 %, over last year. With interest, this year shows 35% of employees saying they log in at least once a week, from a 3rd places.

Brick and Mortar: Post CoVid, they continue rebounding well. More good news: Openings are 240% higher than closings, compared to January – May cycle of last year. Confirming, online sales eased from 23 % to 21 % of sales. Said numbers do not count gas, vehicles and dining.

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

One cannot repeat this enough. WE need them.

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:

 Apartments: Yes to out-of-state, 1st time investors. Urban settings are making a great rebound in rent growth from the Co-Vid exodus.

 Land-to-Build and Fix-n-Flip: These market holds steady. True for our repeat clients in this space, as well as new people first entering this market.

 On-Edge Financing:  Success loves company. This especially true for those searching for a selling strategy to successfully avoid / defer Capital Gains taxes. This number is strong. Good News:  We offer proven and effective tools to keep your cash working, for you. Are you considering selling, let’s meet first. Here we can discuss potential tax burdens and available tools to avoid or delay, the impact. We can answering questions and layout workable scenarios. Such is good stewardship of your hard earned estate. With this, information becomes the key to success. Call today. Don’t delay.

 Yet More Financing: We are an excellent source for standard financing of investment properties. This includes apartments and NNN properties – high priority properties most sought after by lenders. Good News: Cap rates remain quite low and market participants are active in numbers.

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 rates still to good to 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.

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