Commercial Lending
The Business & Investor Side of Our Work
Navigating Today’s Commercial Lending Landscape – June Insights
Good Morning, and welcome to our June commercial lending update. I continue to value the insightful conversations I have with clients and partners each month. As Brian Chesky once said, ‘I would rather have 100 customers who love me than 1 Million who like me,’ a sentiment that truly resonates with our commitment to deep, meaningful relationships in commercial finance. Thank you for your continued trust and engagement.
We’re always exploring tailored solutions for our clients. Here are some strategies that may be new to your commercial property portfolio:
No and Low Doc Commercial Loans: Ideal for specific situations where traditional documentation is a challenge.
Portfolio Debt Strategy Management: For those with 5+ commercial properties, we offer advanced tracking and management tools to facilitate swap restructures, defeasance buyouts, and other strategic adjustments.
SBA Loans to Refinance SBA Loans: Discover how to optimize your existing SBA loan structures.
Account Receivable and Inventory Financing: Unlock liquidity from your current assets.
Call us to discuss how these strategies can benefit your specific investment goals.
Economic Realities:
What’s Happening Now?
Let’s delve into the current economic realities impacting commercial lending. As David Bahnsen wisely notes, ‘We should ignore the latest headlines du jour as they very rarely impact the long-term economy. Interesting to talk about, yet we have to be careful of letting the emotional impact get in the way of a rational long-term investment strategy.’ This perspective guides our analysis of key indicators:
1) Federal Reserve & Interest Rates: Our favorite “tea leaves” is the 10-year Treasury, continues to trade in the 4 – 4.5 % range, since late January. The recent Federal Reserve Board meeting did nothing as we expected.
Very interesting recent comments by Dr. Chris Thornberg of Beacon Economics. Paraphrasing: The Federal Reserve cannot afford to lower rates as the US is still working thru the economic bubble created during CoVid from the extreme pouring of money into the economy. So over-heated still that interest rate drops would result in a resurgence of inflation, and a weakening of the dollar. Both of which would have more potential damage than the current track.
2) Key Economic Data: Inflation
PPI headline: -.5 % and core -.4% This puts us now at 2.4 % and 3.1 % year over year. Continuing the ongoing downward trend.
3) Jobs Market: Numbers Matter
Job market slowly moving into our perceived alignment of a slowing economy. Beginning to have 3 + week averages of unemployment filings hit the mid 200 thousands. Up a good 10 % from earlier averages. The U-6 which counts extended benefits has been rising. The unknown is of those, how many get jobs and how many simply fall off benefits.. Short answer we can expect the employed percentage of the economy to continue slowly shrinking.
4) Politics: From recent comments by Felix Zulauf: Politics will play an increasing role in determining swings in the stock markets and the financial markets in general. A new quality of volatility as what the major leaders do in the world politically. And the political mood swings mean to sentiment because the market trades expectations and expectations are a reflection of sentiment. Finally the idea of a “consensus’ view is increasingly irrelevant.
5) Uncertainty – Four Focal Points: Four main focal points underpin the current level of “uncertainty”. DOGE, AI, Tariffs, and the Bond Market. Of these and over the next few months, some will become more of a measurable risk. Others will be ongoing change agents.
Good News: We diligently monitor these and other metrics for you. Our goal is to bring clarity and essential objectivity to our conversations, focusing on data over hype. We are here to complement and deepen the information you already have. Please give us a call; your thoughts and plans truly matter to us.
Good New: Whether buying, selling, refinancing, or executing a successful 1031 Tax Exchange, we have the expertise you need to secure financing right for you and your situation.
Spotlight:
Retail Shopping Centers & Investors
We specialize in financing for Retail Shopping Centers and Residential Investors. Our success in today’s lending environment stems from two critical factors: 1) Deep industry knowledge, and 2) A detail-oriented approach. We invite you to call us to see how this expertise can benefit you – this is where success begins.
Regarding Retail Sales: We’re observing some softening. April numbers were slightly revised down, and the initial May read shows a 0.9% month-over-month decrease. Most of this decline is in big-ticket sales. However, year-over-year, retail sales are up 3.4%. While media may report ‘the consumer is showing signs of weakness,’ we encourage a closer look at what a 3% increase truly signifies. We will continue to monitor these trends closely.
Why retail shopping centers?
1️⃣ Leases Matter – Every lease is unique, both in terms and structure. And both directly impact lender interest and loan terms. It is here, we help navigate what can be complex.
2️⃣ Market Stability – Shopping centers offer steady occupancy and income streams, and limited new construction. A proven way to better compete with online shopping.
NOTE: While a key focus, we also successfully structure loans for apartments, hospitality, storage, office, industrial, agricultural, and development projects. Call us – we truly make a difference in securing the right financing for your needs.
The Good News
We recognize that headlines and predictions can influence lenders, banks, and underwriters, as emotions are a part of the workplace. Our awareness and diligent work allow us to effectively ‘sell’ your story and project to secure funding.
Consider these counterpoints illustrating optimism versus pessimism:
Headline – Fact: The World Bank predicts the weakest growth since the 1960s, with Chief Economist Indermit Gill stating, ‘Without a swift course correction, the harm to living standards could be deep.’
Another View: Dr. Ed Yardeni has frequently expressed his expectations for the ‘Roaring 20s,’ maintaining a very bullish long-term outlook even when his analysis suggests prudence.
Key: We maintain ongoing, strong working relationships with key stakeholders across the lending spectrum. This allows us to identify resilient markets for smart investing, based on careful study of long-term fundamentals, cash flow, and balance sheets.
Be Ready Before the Market Moves: It is often darkest before the dawn. We anticipate new and significant investments coming to the USA.
Know How to Win: Success in this environment requires Discipline, Preparation, and Patience. Partnering with a professional team – one that is Proven, Trusted, and Successful – is essential.
Be Ready Before the Market Moves
It is always darkest before the dawn. New and Significant Investments are coming to the USA.
Know How to Win: Discipline, Preparation, Patience.
A professional team – Proven, Trusted, and Successful.
Tax-Deferred Exchanges (1031s) Are Booming
If you’re considering a 1031 Exchange, If you’re considering a 1031 Exchange, let’s talk before you sell to ensure you maximize tax benefits, keep your cash working efficiently, and reinvest smartly.
Loans Coming Due? Act Now.
Loan extensions are no longer guaranteed or as straightforward as they once were. If you have an upcoming maturity, don’t wait – start the financing process early, even today!
Creative Solutions for Complex Properties
Do you have a unique investment property or a deal that doesn’t fit the traditional lending box? We specialize in structuring creative solutions to secure financing when others can’t.
Let’s Talk Today
Good financing is built on great relationships. Our lending partners trust our process and attention to detail, which translates into better execution and smoother closings for you. If you or someone you know is seeking expert lending guidance, we are here to help.
Now is the opportune time to start preparing for tomorrow’s success. Let’s connect today. Early preparation is truly key.
Before all else, please take time to enjoy your family and friends this Summer season. While financial success is important, lasting wealth is found in the sincere moments we share.
Stay well, stay safe, and know we’re here for you.
