Your February 2023 Commercial Lending Success and News

Good morning to Springtime Investing,

Commercial Lending

The Business and Investor Side of Our Business 

Healing of supply chain issues continue. With this, the latest Cass-Freight index shows continued easing. This is a bit of good news, as an easing of freight costs helps with inflation. 

Good News: Retail sales showed a surprise increase in January after negative growth in both November and December. For commercial real estate, most of the increased gains were in department store sales. Key: Converting excess inventory into cash assets.

1) Interest rates: Rates continue to trend sideways. Latest Treasury auctions showed a solid 10-year auction, followed by a poor 30-year auction and 20-year auction with below average demand. Call to learn more to see how these numbers influence your mortgage decisions.

2) Residential Real Estate: Nationwide, we are seeing increasing activity. As expected. Springtime buying has begun. Overall, home prices are favoring the Buyer, while well-priced homes are showing increases.

Also of interest: After 18 months of record breaking increases, residential rents are taking a break.  This as apartment completions are at a 34 year high point.  This new supply will help ease future inflation, as housing is a major component in determining inflation.

3) Commercial: Jobs, expectations, Federal Reserve policy weighs down on commercial real estate. Call us.Let us help you prepare how to best navigate these choppy waters. 

Outcome: These sideways pattern of rates should continue, as we anticipate Spring. Key: Management of inventory will continue to be near-term liquidity challenge. Good News: Commercial investing, as a whole, is far more diverse, with each client’s financial goals and interest, varying considerably. Our goal: Matching our clients with the best lending options and programs. Let’s talk. 

More Tidbits and Information:

Retail, Restaurants and Hotels: Holding up quite well. In spite of a drop in savings and fears of inflation, people continue to eat out and go out. The expected declines in these sectors has not yet materialized. People are quite imaginative and quick to adapt, when called upon. 

Food and Inflation: Big food, had difficult times over the past decade. However, during the CoVid days, they had a resurgence as people returned to names of long-standing – General Mills, Campbell Soups, Krafts, and such. As CoVid recedes, big food may again see coming challenges. With inflation, came substantial price gains, along with “size-flation” – same price, less product. The outcome: Beginning to see a drop in units sold, but not necessarily a corresponding decline in total sales – dollars received. Question: How long can this pattern be repeated?

Wild card: If mismanaged, our economy slides into Stagflation – high inflation, high interest rates, even in the face of rising unemployment and slow economic growth. Be aware.

Call us. We are here to help. 

Success Stories

Good news: Our commercial success is building steam. We offer flexible loans with excellent programs and great terms – plus our proven successes. It keeps our phone ringing. Let’s talk. We can help.

Loans coming due are in high demand, as evidenced by our increased work to refinance various commercial properties. Suggestion: Check loan parameters and due dates, and don’t miss the annual financial updates most lenders request. Stay ahead of coming dates, and thereby staying off the radar. This will keep your lenders at ease and keep peace in your life.

Good News: We have great lending partners. They respect our work and attention to detail. This is good news for you, as they trust our approach and loan packages. In response, we carefully strive to maintain the quality of their depository relationships. This is called team chemistry and is what makes this lending relationship a winner. Join our team.

You have heard me say: It starts with a first conversation. Let’s talk. 

Have a joyful Spring, as the smell of new flowers and blossoms fill the air. Many blessings.

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