Good morning to Summer fun;
Back to Business – Commercial Investing
Stay Strong – Be of Great Courage
Take Full Advantage of Great Rates
Many sectors in commercial real estate are showing positive signs of recovery. While some sectors yet lag in this CoVid recovery, we find Good News. Apartment construction starts have jumped up and rents show an increasing trend. But a lag remains, particularly Retail Regional malls. Here, vacancy is quickly approaching 12 %. This is followed by Neighborhood and Community Center retail heading towards 11 %. Asking rents for both, getting close to par.
News of Interest: Hotels on auction sites are up dramatically, while many smaller properties are finding needed capital to ‘make it another 3 months’. Question: How bright the light at tunnel’s end. In this, investor challenges in Portland, Chicago, New York and Houston are bringing this sector down a notch or two. We are watching the numbers.
Call to Action: Underwriting
The Bad News: CoVid in 2020 effects on incomes, net cash-flow, and property valuations.
Current estimates: Close to 10 % of commercial loans are with special servicers. The BIG question: How will this be handled, as we emerge from CoVid? There will be work-outs, the question: How they will be structured, how will they be evaluated, and how many will move to foreclose? These are pre-dispositions of lenders and their view on present-day risk. Call us.
The Good News:
We have the needed tools to hold an intelligent discussion around workable options and real-time solutions. And, as friends, we can talk about differing strategies of successfully investing in a stronger tomorrow. One tool helps points out increasing of rents and decreasing vacancies. We utilize month-by-month rent rolls and runs cash-flow statement, to make the ‘story’ of a brighter tomorrow and stronger P&L’s. My kind of investing.
In the meantime, look for even more “Bridge-lending” this year – and next. A “Bridge” loan
is a great 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, and 3) some rates on buildings, starting in the 2’s % !!
Call Today! – Don’t Delay.
Do all you can for your local Small Business
One cannot repeat this enough. WE need them.
Inflation: Hmm, CPI (Consumer Price Index) up 0.9 % in June, equating to 5.4% year-over-year. The Core Reading is up with a year-over-year reading of 4.5 %. Where is the reaction, the outcry? One would think reactions would abound to this 2nd Quarter reporting.
Instead: Stock are up and the Bond market flat. 10 year Treasury is well off the high’s hit in January. This while another Fed voting member was talking about chilling out a bit, on activity, sooner vs later. Reaction to the 30-year US Bond auction may prove interesting. It was a poor auction, but our interest rates were not affected.
Outcome: I am allowing for a confluence of factors, that will begin to smooth out as we approach Fall. Pent-up demand exploding with a supply-chain unable to keep pace. Why? Perhaps because potential workers are enjoying the summer, with family, that they missed last Summer? So with jobs waiting and kids returning to school, the supply vs demand balance should return, as people return to work and pay-off credit cards. If not this, it will prove fun to watch the experts explain.
So for now, let’s not over react to unemployment numbers, inflation, or politicians.
Good News: The benefit of vaccines – States, stores, and schools re-opening. With it, States are ending the extra pandemic payout. This is needed and responsible, especially with so many new job openings. People and States will benefit.
Re-Openings: Pent-up demand is showing. Retail is having a huge surge (up 35 % year over year) with online percentage of sales with brick and mortar dropping off 8 %. Amen.
Commercial Refinances: CoVid weakened P&L’s. The Good News: Lenders are still lending and financing continues. Kicker: They are being more diligence in the quality and detail of the paperwork. Here is where I can help. Let’s talk. Let’s start the “prep” work today.
We know the paper work, the process, and how they think
KEY: The Good News of great rates and what it means to your investments.
These rates offer unique opportunities: 1) Secure solid financing, 2) Modify one’s commercial investment portfolio, even an exchange to defer taxes, 3) Strengthen the balance sheet, and 4) Increase net cash.
If you are ready, then let’s get going. Let’s talk today.
In the works:
Rents for Apartments: A compromise. With a Year-end estimated that 28 % of tenants being past due, a “CoVid Bill” is being discussed. It would offer monies for landlords with a Trade-off. Landlords recapture 80 % of monies owed, if they forgive the other 20 %. Other plans may be in the works.
Office properties: Slipping. Those with market challenges are putting properties on the sub-lease market. No Surprise: AirBnB is offering their SF building for sub-lease. When one considers having 100 employees and 60 desks.. There is much to contemplate.
Good News: On-Edge Financing
Looking ahead, may I remind you that we do ‘on-the-edge’ financing. This includes: Gas Stations, construction companies, and even commercial condo’s. Included is a smattering of small apartment buildings. It is a team game. First, with lenders having an “on-going-work” approach to lending and second, wonderful clients ready to work and meet the challenges. Add to this, our professional expertise, what you want to get done, gets done. Deals get closed. Let’s talk. Good things come from good preparation.
As a 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 interest rates unbelievably low. We are proven, with quality lenders ready to lend. Call today.
TRUST THE PROFESSIONAL
Trust the true value and peace of getting your loan done – right.
Many blessings for family and friends.