Good morning to the Federal Reserve in action;
Commercial Lending
The Business and Investor Side of Our Business
Focus
Focus of my commercial lending: Retail Shopping Centers and Investors, with specific attention to where my direct marketing points.
This focus comes with my 35 years in the lending space. I have knowledge, capacity, capability and the associates to cover a vast array of lending needs and demands. Good New: I do pay referral fees ! I depend on your business, your introductions and you referrals. It is why we have developed the heavy list expressed below. THANK YOU!
I / we at Michael Ryan & Associates have the lenders needed to find the best alternative solutions, at the best rates. I love to encourage, explain and educate. You are my focus. Call.
Our lending partners:
Direct Lenders
Wall Street and Banks
Credit Unions
Insurance Company’s
Agency
Our more complete list of “property types”:
Retail Shopping Centers
Industrial
Commercial
Apartment
Mixed-use
Self-Storage
Agricultural
Primary Range of Loan Parameters:
Long-term Fixed rate
Fixed – Arm
Interest Only
Credit Lines
Recourse / Non-Recourse
Defeasance Buyout
Syndications
Debt / Equity
Construction
In a nutshell, we are about financial solutions for commercial real estate owners. Goal: To maximize investor profitability.
The Economic Narrative: Market happenings and You
1) Federal Reserve: Talk is everywhere, yet so many critical points are missed by the media:
A) The Fed: will continue to reduce their balance sheet – at same slower pace of the past 6 months. Potential: A tightening of credit supporting higher rates.
B) More rate cuts to come – Expectations are for additional cuts to be between 1/2% to 1% by year-end. Potential: this loosening of credit will bring support to lower rates.
C) Headlines suggest the Fed being in panic mode. Incorrect. History shows all of the recent Federal Reserve shifts begin with an initial interest rate reduction of 1/2%.
2) Economic Data-points:
A) Quarterly Survey of Plant Capacity Utilization: Showing both labor and material constraints are back to 2019 levels.
B) Construction: Since 2019, spending on manufacturing plants is up 217 % and over 100 % over 2 last years. Construction spending is one part of investment spending, then comes equipment, tools and personnel. Recently Q2 productivity is up 2.3 %, with unit labor costs just under 1%.
C) Fed Funds Rates: What is the trajectory expectations for Fed Funds rates? Based on history, the Fed Funds rates – currently at 4.875% – have been below the 2-Yr Treasury Note, at 3.59 %. The last time for such a significant inversion was 2007, and briefly due to the CoVid shock. Typically as well, the 2-Yr. Treasury leads the trend for Fed Funds rates. But this trend was broken in late 2021, when the 2-Yr was increasing long before the Fed. A clear indication the Fed should have raised rates sooner. Hindsight is great, however the lesson is to bring awareness to the current market. What seems clear again: The Fed 100 % track record, repeats again. The market was not surprise, only asking why just before elections.
D) Yield Curve: Normality has returned. The inverted yield curve – comparing 2-year vs 10-year Treasuries – finally returned to normal. The 10-Yr again provides a better yield than the 2-Yr. This, after the longest period in history of being inverted. Observation: As a recession predictor, the past 5 recessions began within a year, of the return to normal.
My Perspective
The Federal Reserve will continue to runoff the balance sheet, slowly. My take: 2 % inflation occurs only if the housing market flattens. Can this happen, if rates keep falling and if there is growing pent up demand? If recession is coming, let’s hope for a soft landing.
Planning for potentials will be key to continue generating wealth in the coming turn of the market. Please understand – elections matter and deficit spending has impacts on rates.
More Fed cuts.. yes they are. Probably in 1/4 % increments. Key seems to be unemployment. If it kicks up, it could trigger another 1/2 % cuts.
Call us. We are ready to help today.
I hope you find these insights instructive for Commercial investing and our Residential work! Key to Both – Discipline, Preparation, and Patience.
Banking and Financing: DIY or using a Broker.
DIY: Benefit: You can trade on your historical connection with your Bank. Downside: You are not always sure they are actually getting it done. The Bank loan agent brings the deal in the door, but they are not allowed to tell you the percentage of actual closings.
Broker: Yes, you do pay a point – Except with SBA and residential lending. Benefits: Our connections to lending sources, interaction with industry groups, and continued conversations with our peers. This brings about true and open competition able to quickly adapt to the shifting landscape and your unique situation. Do you benefit from hiring Mike Ryan? Time proves to be Yes. And with future challenges ahead, all the more reason to call. As a Broker, your victory is my win.
Good quality isn’t cheap. Cheap isn’t good quality.
Thoughtful Consideration – Call Today
Our commercial successes continues. The depth of our lending partners allows us to work with certainty of execution. We are getting it done. We have the proven trust and credibility!
Do you have an under performing, out-of-state property, with a ballon note coming due. We are able to provided solutions for mixed use project to avoid a default. This helps buy the owner needed time to finish leasing up the property and obtain long-term financing. CALL.
To this, we have another client moving forward by investing in an additional small apartment building. Good news: Interest rates in the 5’s. Not all the news is bad. Let’s talk.
More Good new: We hear from our friends that business in the tax-deferred exchange business, is booming. If you are considering moving or trading your investment assets into a set of similar assets – please don’t hesitate to call me. We can provide helpful information and news, on ALL the benefits of deferring Capital Gains taxes. KEY: Know your full range of options and benefits, before simply pulling the sell trigger. This first step is most important.
Consistent calls: Business opportunities. Good news, healing from the CoVid disruption, is going well. With this, much is going on in the investing market – AI expansion to name one. Regardless, the challenges of the new frontiers, there is one constant: We love digging deep in seeking and finding solutions, regardless how unique. Know someone in need of such help? Call us ! We are ready and now is the best time to begin the process of preparation.
Consider as well, the breadth of our lending, that sets us apart. 1) business-purpose loans – with light documentation – to 2) re-development building projects for housing, plus 3) commercial property purchases. How does this work? It works because of who we are. We offer a broad range of lending partners able to provide flexible loans, excellent programs, and great terms. It is how we help move your life forward and our track record shows it. It is what keep our phone ringing. Let’s talk. We can help.
Consider Loans Coming Due: They are in high demand, as evidenced by our increased work to refinance various commercial properties. Recent statistics show 30 % of maturing loans were refinanced, 25 % were modified and 40 % are in default. In todays market of risk and uncertainties, it’s key to check loan parameters and due dates. For certain, don’t miss the annual lender requested financial statement. Key: Stay ahead of coming due dates to keep your lender smiling. Good organization is most worthy. We are ready to help.
NOTE: If you have payment concerns, please call.
We can help with loan modifications
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 today.
Enjoy your family and friends this Spring season. With all the financial talk, key is who we have around us and with us. Be well and be safe, knowing we are here for you.