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 signs of recovery. While others continue to lag in this CoVid recovery. In particular vacancy in Regional malls still struggles. Yet those centered by grocery stores and home improvement stores, show the most strength.
News of Interest: Apartments continue signs of strength, outside of the major core areas. In particular, sub-markets are showing the most growth. Consider Inland Empire as a point of exodus to LA , as well as, suburban Sacramento vs its inner core. This seems motivated by the “work from home” dynamics. The question is, will this dynamic continue, as we move forward?
Call to Action: Underwriting
The Bad News: CoVid in 2020 did little good to incomes, cash-flow, and property valuations.
With half a Trillion dollars of commercial debt maturing this year, worry abounds. Sector by sector, income numbers are generally lower than pre-Covid. As a result, appraisers alike will trend towards higher Cap rates. These pre-dispositions are the current fabric and risk in lending. Call us.
The Good News:
We have the special tools needed and will use time as our friend, to talk of recovery and a stronger future. One tool utilized to show increasing rents and decreasing vacancies. Using month-by-month rent rolls and running cash flow statement to tell the ‘story’ of a brighter tomorrow and stronger P&L’s.
We will still see more and more Bridge lending this year – and next. A “Bridge” loan
is a great option, during times traditional commercial underwriting falls short. Let’s Talk Now.
SBA Lending:
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.
Market News
Inflation: Can anyone say “supply-chain” bottlenecks. This is a serious problem with much of the world still struggling with CoVid restrictions. This supply-chain issue will impact our return to a more normal economy. It brings a temporary imbalance between the supply of imported goods and our growing demand for more. It is a drawback to becoming overly dependent on other countries to supply our needs and wants.
Outcome: A temporary, but most noticeable bump in inflation.
Compounding this is new job openings are occurring faster than people looking. Clearly our government failed to appreciate the strength and determination of the American spirit. Thus it is time to bring an end to extra unemployment monies.
So for now, let’s not over react to unemployment numbers or inflationary spikes.
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 nice surge and with summer, so too, vacation destinations. Even demand for conventions and international travel. 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
Here is where we can be most helpful: The do’s and don’t of Refinancing a “Balloon Loan”. It the most common and frequent request for help – especially now. We can be of great help and a quality sounding board, in the discussion of options and timing and best lenders.
KEY: The Good News of great rates and what it means to your investments.
Excellent 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.
Lets review the realities of office vacancies and are they still rising? Retail shows sparks, yet the question, are they off the ropes? Based upon credit analysis, lenders remain shy. Let’s talk why and what sectors are improving, with rental rates showing solid improvement.
Looking Ahead
The Good News: American Ingenuity and Innovation. Most noticeable are Electrical Vehicles with enhanced AI – artificial intelligence. This includes both Cars, and Trucks. Equally significant is Genomics – the study person’s genes structure or genome. This includes interactions between genes and with the person’s environment.
These are the new industries, making major changes in our lives and represent future growth and investment. They represent what could be thousands, even hundreds of thousands of new jobs. Now the race to match qualified skills with the specific tasks at hand. Near term, there maybe a short fall, but we are quick to adapt. This is the American way of success.
In the works:
Rents for Apartments: A compromise. With a Year-end estimated that 28 % of tenants are 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. Reserves and resources are nearly out and staffing is not at 100 %. Current estimates suggest that 30 % of office workers are now classified as ‘remote friendly’. This cascades to surrounding local shops and commercial centers. The offset is the positive benefit to local neighborhood shops and services, close to home.
Reopening of Schools: A key indicator to normalcy. I expect a major shift in near-term expectations – soon. In-home day care / schooling has proven not be the solution. With Summer upon us, we now wait to see what the facts are with the new school year beginning in August and September. All levels to be counted, from primary through college. Open classrooms and bodies in seats will tell the real story.
Good News: On-Edge Financing
As we look ahead, it is good to be reminded 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 wonderful clients ready to work and meet the challenges. Add to this, our professional expertise, and things get done and deals get closed. Let’s talk. Good things come from good preparation.
Summary
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 benefit of getting your loan done – right.
Many blessings for family and friends.