Commercial Lending Insights: August Market Update & Financing Solutions
I hope you are enjoying the last of the summer. As we navigate the evolving economic landscape, staying informed is key to making smart investment decisions.
Here’s our latest market update and a look at some of the financing opportunities we’re currently seeing.
The most important thing in business is to know what is important. The second most important thing is to measure it. John Doerr
Successful Closings Are Our Priority
Interesting Loan Product Spotlight: Who do you know someone who needs?
1) HOA Loans: Financing for HOA associations for essential upgrades and repairs.
2) Banker Loan Fallout: We have a 90% financing bridge solution for 504 loans that are delayed due to a difficult Certificate of Occupancy (COE) or other solvable circumstances causing delays.
Economic & Market Realities
1) The Economy: We’re seeing a “muddle-through” or “floating” economy. Real final sales figures suggest a slowdown in growth since 2023, though the Congressional Budget Office (CBO) projects a stable 4% 10-year Treasury yield and unemployment rate through 2027. The good news: wage growth is still slightly outpacing inflation.
2) Manufacturing:
Mixed bag. Approximately 400,000 open jobs waiting applicants. Whether a geographic mis-match, training or Generational interest? Jobs and growth are there to be had. On the leading side, large developments continue in some areas of the Country, how do you say Atlanta? Also timber land sales are up leading one to think the US lumber industry might make a run at waking back up.
3) Inflation:
While still a bit “sticky,” inflation is not yet fully reflecting recent tariff effects. Items like bedding, furniture, and auto parts have had a small but noticeable impact. The biggest driver remains Owner’s Equivalent Rent (OER), which accounts for a significant portion of the overall inflation number.
4) Interest Rates: On the residential side, mortgage rates have recently dipped back toward the low 6s, following stable jobs and inflation reports. This signals a positive trend for borrowers.
5) Capital Flows: Investment volumes for commercial real estate climbed 13% year-over-year in Q2. Notably, lending momentum surged 45%, with alternative lenders taking a larger share of deals (34%), outpacing traditional banks.
Spotlight: Key Market Sectors
Apartments : We are seeing interest rates for apartments continue to slide lower, with some quotes now starting with a 5.
General Market Outlook: Inflation, growth, income and expense are all in the OK arena. And, each could be worse. Let us exhale a bit that it is not worse. What does this statement of reality look like in your Income / Expense statement and Balance sheet?
California Insights: After several years of decline, California’s population is growing again. The state’s Department of Finance reported an increase of over 67,000 residents for 2023. Followed by an estimate of 108,000 population growth in 2024. This growth is driven by a decrease in deaths, changes in domestic migration, and legal immigration.
NOTE: We successfully structure loans for apartments, hospitality, storage, office, industrial, agricultural, and development projects. Call us. We make a difference.
Key: We have on-going, good working relations with all types of lending facilities.
Our Services: How We Can Help
Tax-Deferred Exchanges (1031s) Are Booming:
If you’re considering a 1031 Exchange, let’s talk before you sell to ensure you maximize the tax benefits, keep the most of your cash working for you, and reinvest smartly.
Loans Coming Due? Act Now.
Loan extensions aren’t guaranteed or as straightforward. like they once were. If you have an upcoming maturity, don’t wait – start the financing process early.
Creative Solutions for Complex Properties
We specialize in structuring financing for unique properties and deals that don’t fit traditional lending criteria.
We successfully structure loans for a wide range of properties, including apartments, hospitality, storage, office, industrial, and agricultural projects.
Call us. We make a difference.
Let’s Connect
We’re in the business of building great relationships, and our lending partners trust our process. This leads to better execution and smoother closings for you.
With expectations of falling interest rates and significant new investments coming to the USA, now is the time to start preparing for future growth.
Let’s talk today to get a leg up on the market.
