Commercial Lending Insights: September Market Update & Financing Solutions
I hope you are enjoying the last of the summer. As we navigate the evolving economic landscape, staying informed is key to making smart investment decisions.
Here’s our latest market update and a look at some of the financing opportunities we’re currently seeing.
Successful Closings Are Our Priority
Interesting Loan Product Spotlight: Who do you know someone who needs?
1) HOA Loans: Financing for HOA associations for essential upgrades and repairs.
2) Banker Loan Fallout: We have a 90% financing bridge solution for 504 loans that are delayed due to a difficult Certificate of Occupancy (COE) or other solvable circumstances causing delays.
Economic & Market Realities
1) The Economy: This week the Federal Reserve meeting moved the benchmark Federal Funds rate down by 1/4 %. This will directly translate into the ‘Prime’ interest rate and those rates tied to the Prime rate. i.e. credit cards, many home equity lines of credit, many construction loans, etc.
Many speak or question about both mortgage rates and the 10 year pricing going back up. A couple of points to make for explanation;
1) There was a bit of built in expectation for a 1/2 % move, so taking that back. Additionally the market looks forward, therefore the rate drop over the past week or so was in anticipation of this weeks Fed rate cut.
2) Other Fed comments about inflation somewhat elevated, yet the tariff’s only a part of the equation. And add in comments towards the labor market getting weak.
3) The day after we had a very mild weekly unemployment report which is unfriendly to our interest rate market.
2) Manufacturing: On a deflationary point, Industrial Capacity continued to show no signs of improving. Excess capacity can lead to price reductions to increase capacity utilization.
3) Inflation: CPI still running hotter than we would like, however the pure guesswork built into the numbers are adding about 1/2 % into the number. 1/3 of the Core CPI calculation is based upon ‘Owner Equivalent Rent’. A number that is pure anecdotal and guesswork.. Let’s hope the new head at BLS will get the memo.
4) Interest Rates: Commercial interest rates have eased, along with the 10 year and other Treasury notes. Apartments and some SBA work are back often times starting with a 5.
Spotlight: Key Market Sectors
1) Commercial Real Estate: Nationwide Retail continued to be the best performing asset class, followed by Industrial. The Apartment sector also inched upwards beginning the 2024 decline recovery. Offices, both CBD and Suburban posted price gains as well. Investor sentiment remains cautiously optimistic.
2) Jobs Data: QCEW report for April 2024 – March 2025, reported job growth at 1.75 M. The QCEW has cut that number down 1/2!! This is something we have talked about so you can be better informed when you make your investment decisions. Those who purchased already this year will be ahead of the game. Now we have 2 months of better initial data, leading into a better sense of what the market is.
3) Land Costs for New Home Construction: Excerpts from an interview with the CEO of Pulte homes (# 3 builder in Nation). Tariff impact on building costs: 2025 – zero!, 2026 estimated at $ 3,000 per home (average home price $ 570,000). They have land, the trades base is good and stabile. A large challenge is working with cities and communities who are requiring larger lots, and larger minimum home sizes. With land currently running 25 – 30 % of the cost, these municipal / governmental requirements are hedging costs to homebuyers higher. Not helping.
NOTE: We successfully structure loans for apartments, hospitality, storage, office, industrial, agricultural, and development projects. Call us. We make a difference.
Key: We have on-going, good working relations with all types of lending facilities.
Our Services: How We Can Help
Tax-Deferred Exchanges (1031s) Are Booming:
If you’re considering a 1031 Exchange, let’s talk before you sell to ensure you maximize the tax benefits, keep the most of your cash working for you, and reinvest smartly.
Loans Coming Due? Act Now.
Loan extensions aren’t guaranteed or as straightforward. like they once were. If you have an upcoming maturity, don’t wait – start the financing process early.
Creative Solutions for Complex Properties:
We specialize in structuring financing for unique properties and deals that don’t fit traditional lending criteria.
We successfully structure loans for a wide range of properties, including apartments, hospitality, storage, office, industrial, and agricultural projects.
Call us. We make a difference.
Let’s Connect
We’re in the business of building great relationships, and our lending partners trust our process. This leads to better execution and smoother closings for you.
With expectations of falling interest rates and significant new investments coming to the USA, now is the time to start preparing for future growth.
Let’s talk today to get a leg up on the market.
