Commercial Lending Insights: January Market Update & Financing Solutions
I hope you enjoyed the Holiday Season! A new year, new headlines, our projections for the year published in our last letter to you.
Successful Closings Are Our Priority
I am in the money business. Relating to real estate secured loans, yes. However my focus includes helping to save, access and protect money. Educating with every conversation.
Interesting Loan Product Spotlight:
New to my lending conversations? Here is a quick 10-question questionnaire to prime the pump in my understanding your needs, and to facilitate the perfect financing solution. https://michaelryan.getprequalified.io/
Our recent work has encompassed the Home Health sector, Apartments, Development and Motels with a bit of Industrial to keep the conversations going.
Economic & Market Realities
- The Economy: Chicago Fed has numbers easing coming into the New Year, yet business sentiment warming up a bit with positive anticipation for 2026. Retail sales (reports in for Oct and Nov) showed a nice increase going into the Holiday season. Much has been said about the resilience of shoppers. We continue to spend. Although the flat or called sluggish economy is showing up in some sectors. Hard to analyze is the effects of health care costs and other items like utilities. On another side, in spite of where interest rates moved to the past couple of years, the auto industry is still posting decent sales.
Consumer sentiment and headlines would lead us to think we are on a slide. The numbers tell us we are trending sideways.
Consumer savings up 3rd Q 2025, Consumer credit net charge off’s fell 3rd Q 2025.
Non-farm business sector labor productivity (ULC) up 4.9 %, output increased 5.4% and hours worked ticked up .5%. Unit labor costs down 1.9 % from hourly comp up 4.9 %. 2nd Q ULC revised from +1% to down 2.9%. Lends support to CPI continuing to drop towards the 2 % target.
2. Federal Reserve: Not much to report here, as the next meeting is a week away. Speculators continue to lead the charge yet there is nothing newsworthy to report. Yet.
3. Employment: Here we have more numbers, yet so much of the news is speculative. Unemployment rate dropped a tad, anticipated. The news is going to have to hang onto comments from CEO’s and reports from groups like ADP. Yes, job openings rate is low and inline with slowing hiring. New claims remaining low tying in with comments of less layoff’s and firings. Bottom line assumptions are corporations are holding onto employees.
BLS jobs report comes up light at 50 K (headline – revisions to come) And for Nov and Dec revisions down a collective 75 K in jobs created. As expected the unemployment rate also dropping to 4.4 %.
4. Inflation: Tame CPI. Current numbers came in as anticipated, supporting the December number that was considered questionable due to the shutdown. Headline .31 % with year over year staying at 2.7%. Still progress 2.74% to 2.68%, rounding to 2.7%. Core .2 % with rounding staying the same at 2.6%. Housing component still holding the numbers up, however, we should be accustomed to this by now.
5. Interest Rates: Commercial interest rates continue to trend sideways. Tracking the 10 year Treasury as our bell-weather finds us still in our 4 to 4.25 % range. Running here the past 4 months.
6. Commercial in General: Opportunity is here. But call for what makes the Property type, Location, Governance and Local economies drive the choices. From secondary markets for industrial, secondary and tertiary markets for apartments, retail in most markets, and opportunistic purchases of office. Re-development gets a lot of play in my company as re-positioning, re-capitalizing and such takes advantage of assets held for long term in need of new energy and capital as long-term ownership moves on.
Spotlight: Key Market Sectors
- Apartment Real Estate: Going local this month. About 4,000 units delivered in 2025, and yet holding a 5 % vacancy rate. Good absorption. For 2026 the estimates are for a drop to under 3,000 units delivered. With low vacancy rates, stable rents with some upwards move can be anticipated.
2. Residential Sector: The base for home loan rates (Mortgage Backed Securities or MBS) are testing the lows we have not seen since Sept 2024. Is this a ‘Ready’ in preparation for ‘Set’ and ‘Go’? Whereas the 10 year Treasury is not able to break out of the 4.15 +/- band.
HEADLINE: Foreclosures are up 14 % in 2025! And, FHA buyers are more at risk! – click bait, the real story is the number of homes in foreclosures are the same as 2023. yes the numbers did drop a bit in 2024, and back to where we were at in 2023. The market is still below long term averages.
Some Of Our Services: How We Can Help
Tax-Deferred Exchanges (1031s) Are Booming: Considering a 1031 Exchange? Contact us before you sell! We’ll help you maximize tax benefits, keep your capital working efficiently, and reinvest strategically.
Loans Coming Due? Act Now! Loan extensions are not guaranteed or as easy as they once were. If you have an upcoming maturity, don’t delay – start the financing process early.
Creative Solutions for Complex Properties: We excel at structuring financing for unique properties and deals that don’t fit traditional lending criteria. If other lenders have turned you down, we may be able to help. Interest only? No tax returns? All available, yet what is the most opportune for you?
We successfully structure loans for a wide range of properties, including apartments, hospitality, storage, office, industrial, and agricultural projects.
Let’s Connect
We’re in the business of building strong relationships, and our lending partners trust our process. This translates 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 perfect time to prepare for future growth.
Let’s talk today to position you for success in the evolving market. Call us to discuss your specific needs and goals!
