Good morning to Fall Investing;
Commercial Lending
The Business and Investor Side of Our Business
Challenging News: Interest rates though holding mostly steady, they are again testing the upper reaches. It can be healthy good for rates to test, but lets hope the 10-yr holds.
We are hearing now of even more marginal properties ‘going back to the lender.’
To help out, we are actively negotiating loan modification on commercial loans. We are working in all States, except Arizona. Good news: ALL types of commercial loans are eligible.
Small Bank, Commercial Bank, Insurance Company, Securitized (known as CMBS). The key challenge: Documentation and contacts. Yes, we have special contacts in most all lending sources of those active in the negotiating process.
Here is what is being accomplished. Extension of due dates – YES – and this includes the ‘we cannot extend’ CMBS loans – interest only periods and more. Why ? Because a newly renegotiated – modified – loan moves back from a liability on their balance sheet to an asset. This becomes a win-win and VERY important for the lending bank. It helps keep the bank stronger and liquid and for the property owners. They are now able to retain their investment asset. Think about it: Who better to operate and carry a property through tough times, than the owner. Who better knows the property better? If this sounds good, don’t wait. Call today.
In Other News:
1) Interest rates: Ouch is the current term we speak.
2) Economic drivers: Its good to keep all aspects of inflation in mind. Surprises continue. Key: Employment is slowly ebbing, once you dig beyond the headlines. Yet, inflation continues to surprise keeping the Federal Reserve on its toes. Watch the 10-year Treasury.
Examples: Retail sales continues the upward pressure. Why, retail sales is a huge portion of GDP. And, America is still increasing spending. This adds to upturn in industrial production and capacity utilization. The anticipated down-turn is still not in the numbers.
3) Residential Real Estate: With a slow down in sales most media outlets once again are reporting a coming doom. Yet slow downs are to be expected and can be healthy. But as long as there is a shortage of housing supply, such slowdowns will most likely begin to uptick upward once again. History proves the point.
4) Commercial Real Estate: Jobs, expectations, and Federal Reserve policy on inflation, both weigh on commercial real estate. Call us. We are here to help you navigate the choppy waters, today. Timing is very important.
For some Investors, more time is needed to work through the distress in commercial real estate brought on by CoVid. Add to this, lending costs of ownership keep rising, making it more difficult to stay the course. Choices have to be made and for some, that time is now! In light of this, we are actively working with commercial property owners for the purpose of negotiating needed modifications to their current underlying loans. The goal: Keep the property in the hands of the investor and thereby avoid issues surrounding default.
The challenge and the need for loan modification for our clients include:
Commercial loan that is coming due,
Property valuations dropping below guidelines,
Investment income no longer supports the current loan and operating expenses,
Installment payments are behind
If our expertise would prove financially beneficial to
– you or someone you know –
please.. let us talk. Call today. Each and every day does matters.
Good News: Loan modifications match well with our disciplined approach to commercial investing – meeting most commercial investor’s financial goals. Key: Carefully matching each of our clients with the best lending options and customized programs. Let’s talk, today. .
Call us. We are ready to help today. In today’s market, you will appreciate our approach.
Economic News Helpful for Commercial Investing
Banking and Financing: Question: DIY or find a proven Broker.
DIY: Benefit: You can trade on your historical connection with your Bank. Downside: Your not always sure they are the ones actually doing the lending. The Bank loan agent brings the deal to the table, but they are not allowed to tell you the percentage of actual closings.
Broker: Benefits: Our connections to lending sources, interaction with industry groups, and continued conversations with our peers. We help keep you competitive and quick to adapt to an ever changing landscape. We respect your unique situation. Downside: You do pay a point – except with SBA. I hope you find hiring Mike Ryan worthy. Time has proven the answer to be yes and with future challenges, you will be glad you called. As a Broker, I win when you win.
General Commercial Market: Declining prices stopped in the June over July track — for all property types. The past year declines, the 4th Q 22 and 1st Q 23 hold the most. It corresponded closely with Fed increases of interest rates. I often quip to wait 90 days from a change, as it takes time for markets to adapt and get accustomed to new normals. Rates have ripple effects.
Quick commercial markets overview: Most sectors prices peaked Summer of 2022. Yet after almost 12 years of consistent upside, a time in negative territory can be healthy as it helps remove speculative pricing, and emotional investing. As for timing, I strongly advised to begin investing in 2011. Why? Because capital markets were moving from negative to positive at the beginning of 2011. And yet, the overall negative mood continued for another 3 years. Simply put, timing the market – peaks and valleys – is often based on triggered emotional perceptions, not facts from detailed study and careful observations. We are here for you. Let’s talk.
With this, consider the many workers wanting to work from home, while at the same time, the number of people actually leaving their jobs, is down dramatically. Perhaps because companies are beginning to require more employees to return to the office. One might think if working from home is a priority, why are not more employees seeking agreeable companies. My sense: Main stream media tends to favor working from home and reflect this perspective. Yet, this bias often interferes with investors making wise choices. My suggestion: Let’s talk to best ferret out what’s relevant and needed for making sound investment decisions. It is time to meet.
Commercial Construction: What’s new: Noticeable slowdown in commercial building. Industrial is leveling out. Over the past year, “net used space” is flat. Flex space is being challenged due to the office component of the investment properties. Manufacturing is a bit dicey, with future orders less predictable. Good News: Medical continues on a positive roll.
Good News: Our commercial successes continues. Our depth of lending partners allows us to work with certainty of execution. We are getting it done!
Our work continues for many of our small business owners. Buying businesses and property is #1, followed by refinancing out of high interest debt utilized in building-out the business is # 2. Inquiries for buying businesses is quite brisk. I am reminded that the entrepreneurs in America are the holders of our optimism. Our track record is proven. It does keep our phone ringing. Let’s talk. We can help.
Of particular need: Ballon Loans coming due. They are in high demand, as evidenced by our increased work to refinance various commercial properties. Suggestion: Check loan parameters and due dates, and don’t miss the annual lender requested financial statements. Key: Stay ahead of coming dates, and keep your lender smiling. Let’s talk. Good organization works.
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 our lending relationship, a winner. Join our team.
You have heard me say: It starts with a first conversation. Let’s talk.
Let the fun of Fall be yours to enjoy. Coloring of the leaves and cooler days.