Your March 2023 Commercial Lending News and Successes

Good morning to Springtime Investing,

Commercial Lending

The Business and Investor Side of Mike Ryan &Associates 

Cass-Freight Index: The slow healing of supply chain issues continue. With this, consider the latest Cass-Freight index. It shows a continued easing – another 5 % drop last month. Good News: This easing of freight costs should help offset inflation. 

Brights Spot in Commercial: Look no further than Flex/R&D and Distribution Warehouse. After 2 years of strong rent growth, we still see vacancy rates sliding. Vacancy rates – Pre Co-Vid – were pushing 10 %. It is now down to 5 %. Rent growth was near 1 % and is now running at plus 10 %. Expect more of the same, until balance is restored. 

Latest challenges: Traditional banking: Banking is roiled by recent events with Silicon Valley Bank and Signature Bank, plus the need to shore up First Republic Bank. Keep watching, as the rapid rate increases brought home the reality of undisciplined investing, coming home to roost. Their balance sheets and investments make it clear, it’s more than just rates. More to come. 

Concern: Capital drying up due to higher rates, plus Fed efforts to reduce their balance sheet by about 100 B a month. As a result, liquidity has become an issue, as Banks over the past few weeks have been seeking new money from the Fed. In response, the Fed has added $300 Billion to their balance sheet. Quite the quandary. Inflation – Liquidity – Banking practices. 

Good News: A decent year of sales, from shopping malls – near zero expectation now seeing sales increase of 10 % – to multi-family projects where some tout it is currently less expensive to rent than own. I anticipate a pause, as the regional banks sector comes to grips with the current turmoil and the Fed better addresses the issues. This should help spur future growth. 

Interest rates: Rates continue sideways. However, the inverted yield curve is now half where it was just a couple of weeks ago. Note: Buying of shorter term treasuries leads to higher prices and lower yields, when measured against yields on the 2-year and 10-year treasury. 

Residential Real Estate: Nationwide, Springtime buying has begun, as we see the expected increase in activity. Overall, home prices favor the Buyer, while well-priced homes are showing increases. There are cloud of concerns that will likely effect home prices: rates, liquidity issues, stock market fluctuations, and tech sector layoffs. They rest equally on buyers and sellers.  Note: Days-on-market has increased; new home developments are offering concessions to keep the stock moving; and high-priced areas of the Country, showing softness, particularly in the higher-end properties.

 Also: After 18 months of record breaking increases, residential rents are taking a break.  This as apartment completions are at a 34 year high point.  This new supply will help ease future inflation. Why so? Housing is a major component in determining inflation.

Commercial: Jobs, expectations, Federal Reserve policy weigh on commercial real estate. Call us. We can help navigate these choppy waters, starting with good preparation and planning. 


Commercial investing, as a whole, is far more diverse, with each client’s financial goals and interest, varying considerably. Our goal: Matching our clients with the best lending options and programs. Let’s talk. 


Retail, Restaurants and Hotels: Holding up quite well. Excluding autos, last months report on retail sales was off only 0.1 %. This in the face of weather issues and increasing rates. 

Food and Inflation: Big food has had difficult times over the past decade. However, during CoVid, they had a resurgence, as people returned to name brands they trusted – General Mills, Campbell Soups, Krafts, and such. As CoVid recedes, it will be interesting how consumers respond. With inflation, we saw both substantial price jumps and “size-flation” – same price, less product. Outcome: A drop in units sold, but not necessarily a corresponding decline in total sales – dollars received. Question: How long can this pattern continue?

Wild card: Cap Rates. We expect them to increase, as the market responds to rapidly changing market conditions.  Of interest: Buyers delaying in making future investments will bring out the Sellers of need, those willing to accept higher cap rates. In turn, Sellers will need to accept this higher rate as the “standard” cap rates. Sellers will adjust, albeit slowly, and performing properties will be held longer.  Of interest: Watching funds invested in 5 year projects. Will they sell, or will they re-negotiate with their investors to push out holding periods. Time, always will give us the answer. Stay tuned.

Call us. We are here to help. 

Success Stories

Good News: Our commercial success is building steam. We offer flexible loans with excellent programs and great terms – plus our proven successes. It keeps our phone ringing. Let’s talk. We can help.

Loans coming due are in high demand. This is evidenced by our increased work to refinance various commercial properties. Suggestion: Keep your lenders at ease and keep peace in your life. How? By checking loan parameters and due dates. Plus, don’t miss the annual financial updates most lenders request. This keeps you ahead and off their radar screen. 

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 is what makes this lending relationship a winner. Join our team.

You have heard me say: It starts with a first conversation. Let’s talk. 

Have a joyful Spring, as the smell of new flowers and blossoms fill the air. Many blessings.

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