Good morning to the New Year and its forecasts;
Commercial Lending
The Business and Investor Side of Our Business
The Christmas season gives helpful insight into the new year. Yet, further patience and careful preparation now, remains the best strategic approach. Why? A new Presidential administration, House and Senate, will be in place. There is the potential for significant changes in taxation, regulation and government spending. First look: Positive for commercial investors. Lets talk.
Focus
Continuing to develop lending partner relationships to fund your life going forward. Being part of a group of commercial lending professionals provides ongoing feedback for lenders doing great work, those doing so-so, and the occasional one to avoid. Let me know how I can assist you, our team and resources are ready for you.
Special Attention: Retail Shopping Centers and Investors
Our real estate financing speciality is two-fold: 1) Commercial investing, with core focus on Retail Shopping Centers, and 2) Residential Investors. We specialize in just these two, due to evermore complexities of today’s lending market. It also gives us time to focus on the more difficult loan deals and develop a straight-forward approach to our qualified lenders.
Our established relationships cover an array of funding partners. We place loans for all types of real estate – Hospitality, Storage, Office, Industrial, Ag, and Construction & Development loans. Most helpful: In our challenging market, we have the lender you need. Equally: Our team has the talent pool to turn a rejection letter into one of acceptance.
Why so? Because our financial solutions are dedication to meeting the needs of a successful closing. Our Goal: Maximize long-term profitability for our commercial real estate investors.
The Economic Realities:
Changing Markets and You
1) Federal Reserve: As we are in a wait and see mode, so too, the Federal Reserve. What can be observed: Sticky 3 % inflation numbers and a steady job market. What this means is the Fed’s likely pulling back on the anticipated pace of future rate cuts. We will stay diligent.
Insight: Every year, 4 Reserve members go from voting to non. At the same time, 4 new members become voting members. Outcome: We rotated out 4 Hawks, and rotated in 1 Dove and 3 Hawks. Thus the new voting mix will may be a bit more accommodative to lowering rates.
2) Economic Data-points:
A) Inflation Rates: The Fed rate policy is working. Last week’s CPI report was a positive report. When you factor out energy and food and shelter, the year-over-year inflation is 0.9 % !! The Core CPI – year-over-year – is 3.24 %. Shelter alone is 2.11 %. If you factor out Shelter, the Core CPI is 1.25 %. This should improve likeliness of another rate cut. However, the Federal Reserve Board has yet to look at inflation in this manner. I talk about it as it does relate to opportunity to be ahead of the curve.
B) Economic Performance: Since the first months of CoVid – reported by the Federal Reserve of Chicago – the NFCI (National Financial Conditions Index) and the ANFCI (Adjusted National Financial Conditions) numbers have been easing. This one line of the report, summarizes 105 different measures.
I find this interesting, in light of other sources of information and my own research. While my understandings are more specific to real estate lending, we have seen auto loans and credit cards easing.
Further, more alternative loan products are now available – mostly in the residential arena. If your timing is now or soon, give me a call and let’s see if they will fit your needs.
My Perspective :
Spotlight: Apartments Nationwide, rents in December show a 0.6% drop. Year-over-year, rents have declined by -0.6%. Rents are down 5 %, from the peak of a couple of years. Good news: Construction appears to be keeping up with demand, keeping rents mostly flat. Remember, it is all local. Some areas are more negatively impacted and others, continuing to see rental increases.
Past years in the media, rents and prices, have been taking it on the chin. Helpful perspective: In the past 5 years – including 2025 projections – we have added 2.2 M apartments nationwide. Average rents over the same time period, went from $1638 to $1909, or simple 3 % per year. With occupancy holding firm – mid 90 percentile – 2025, “Cap rates” averaged 5.7 %.
For 2025, the word of the day – regarding the economic forecasts – is ‘exceptionalism‘. Fun fact, from Mohamed El’Erian: “During the Obama term, the annual cost of new regulations – 110 B. For Trump years, 27 B. For Biden, we saw 176 B in cost increases due to added regulations. We see similar positive / negative numbers in the Small Business confidence measures. Positive with less regulations – Negative with increased regulations.
Call us. We are ready to help today.
I hope you find this letter instructive for both Commercial and Residential investing.
Key: Discipline, Preparation, and Patience. Plus a professional who loves uniqueness.
Good quality requires that extra effort, proper insight, and perspective.
We are worthy and we are successful.
Thoughtful Consideration – Call Today
Commercial investments: News is quite interesting. Overall, Hospitality is doing fair, but if you look at San Fran, not so. Yet there are major metros where ‘”revenue-per-room” is above 2019. Like many projects, Key question: Is the site location providing expansion, or contraction? This story is the same with Office sector – location, location. Bottom line: There is no simple answer or metric stating the answer. Often, we use some of the high-level numbers in our conversation to assist as a counter-point to media reporting. Key: Our conversation will primarily empathize location, location, location. The helps provide initial insights in determining a good or poor investment.
Commercial success: Closings continues, as depth of our lending partners, allows us to work with certainty of execution. We’re getting it done, with earned trust and proven credibility.
More Good new: Business in the tax-deferred exchange business, is booming. If you are considering moving or trading your investment assets, let’s talk about saving you money. Call today. We can provide helpful direction and news on ALL the benefits of deferring Capital Gains taxes. KEY: Know your full range of options and benefits, before simply pulling the “sell” trigger. This first step is most important.
Consistent calls – Business opportunities: Good news, healing from CoVid disruptions continues. With this, much is going on in the investing market, too – AI expansion to name one. Regardless, challenges of the new frontiers, we find one constant: We love digging deep and finding solutions able to meet your expectation – regardless a propety’s uniqueness.
Know someone in need of such help? Call us !
We are ready and now is the best time to start preparing for tomorrow.
Why We Are Unique: The breadth of our lending partners: 1) business-purpose loans – with light documentation, 2) re-development building projects for housing, plus 3) commercial property purchases. How does this work? It works because we are – a team. We offer a broad range of lending partners able to provide flexible loans, excellent programs, and great terms. It is how we help move your life forward and the Good News: Our track record. It shows why our phone keeps ringing. Let’s talk. We can help.
Loans Coming Due? Lets talk. Extend with ease, has been a steady way of life the last years. However, this has changed. Extensions are not guaranteed and needed time to finance is far longer. Our suggestion: Please start the Extension process today. Don’t wait – Call Today.
NOTE: If you have non-payment concerns, please call.
We can help with loan modifications
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 what makes our lending relationship, a winner. Join our team.
You have heard me say: It starts with a first conversation. Let’s talk today.
Enjoy your family and friends throughout the coming year. With all the financial talk, it is most important to celebrate life with those who love you. Be well. Be safe. We stand with you.