Commercial Loans

IS THERE MONEY TO LEND FOR CRE?

  The CBRE Lending Momentum Index declined by 15% in Q4-22 from Q3 and 27% year-over-year. CBRE cited heightened market volatility amid higher interest rates.   “The Federal Reserve’s commitment to reduce inflation with aggressive rate hikes continues to heighten market uncertainty, as borrowing costs increase and a lack of price discovery persists,” said. Rachel Vinson, CBRE President of Debt & Structured Finance, U.S. for Capital Markets. “While there is plenty of debt capital available waiting to deploy, fewer borrowers are willing to transact unless they have to.” (Bold by Counsel Mortgage.)  

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ARE YOU LOOKING FOR A COMMERCIAL REAL ESTATE LOAN?

Are you looking for a commercial real estate loan?  Do you own a business, or are looking to get qualified for a business loan to purchase or refinance real estate?   Are you confused as to whether to get an SBA loan or conventional financing?   We can help you with these decisions.  We broker commercial loans.  The right lender for you will typically depend on your business.  One lender may specialize on multi-family, while another lender may specialize on gas station loans or land development.  We’ll shop the lenders to find the lender for your purposes.  We work for...

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ONE FOOT ON THE BOAT, ONE ON THE PIER

Amid signs that price growth in the U.S. economy is rapidly cooling, the Federal Reserve announced Wednesday (12-14-22) it was slowing the pace of its rate-hiking program designed to tackle inflation — but that more hikes were still on the table. The Federal Open Market Committee said it was increasing its key federal funds rate by only 0.5% this time around, after raising fed funds .75% at its previous 4 meetings. In its Wednesday statement, the Fed said it continues to target an inflation rate of 2% over the long term and would continue to increase the federal funds rate...

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THE PROBLEM AND SOME SOLUTIONS

  Commercial and multifamily mortgage loan originations decreased 13% year-over-year in Q3-22, according to the Mortgage Bankers Association’s (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations. A fall in originations for office, multifamily and retail led to the overall decrease in commercial/multifamily lending volumes. “After a strong first half of the year, rising interest and capitalization rates began to affect deal volume during Q3,” said Jamie Woodwell, MBA’s head of commercial real estate research. “Increasing yields across investment alternatives – including the 10-Year Treasury yield more than doubling during the first nine months of the year – have shifted property...

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INTEREST RATES UP, ECONOMY DOWN – WHAT TO DO?

The current best indicator of future Fed action is labor market data – Chairman Powell has made that abundantly clear since beginning his war on inflation last May. To that point, the cost of labor in Q3-22 eased at least incrementally, with the Employment Cost Index rising 1.2% over the three months ending September 30. However, the Q3 increase is consistent with a 5.1% annualized increase, which is believed will keep the FOMC on track for another historically large rate hike at its Nov. 1-2 meeting. Current consensus among economists is for another 3/4% bump in Nov., and a 1/2...

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LEMONADE FROM LEMONS, VINEGAR FROM SOUR GRAPES, LOANS IN TODAY’S MARKET

  Are you numb yet? Continuing inflation, continuous raising of interest rates, threats or recognition of a recession! Incoming data indicate a slowing yet resilient economy. Consumers still have in excess of a trillion dollars in excess savings, and they’re draining it, along with increasing credit card purchases to maintain a life style.  Look for good numbers for Holiday shopping, especially if the mid-term elections less than a month away are seen as supportive for the economy.  We find it interesting that some economists are still forecasting a recession starting the beginning of next year.  By definition, we crossed that...

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WHAT IS A CAP RATE, AND HOW DOES IT WORK?

  If you are looking to purchase a commercial property, one factor to consider is the “cap” rate. The “cap” rate is the capitalization rate. The rate is determined by taking the net operating income and dividing it by the value of the building. Many investors look at this rate to help them determine their return on investment.   If you are looking for a loan to purchase a commercial property, contact us. We shop many different lenders to find the best loan for you. We are mortgage brokers. We work for you, not the lender.   Counsel Mortgage Group®,...

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THE FED CONTINUING TO FIGHT INFLATION – ANOTHER RATE HIKE

  The FOMC unanimously decided yesterday, the 27th, to boost its target interest rate, the fed funds rate, by 75 basis points (bps), or 3/4s of a percentage point, the second time in as many meetings it has raised rates of this magnitude, marking an aggressive tightening cycle to battle the decades-high inflation rate, increasing the likelihood of triggering a recession. (From today’s Q2 GDP, already triggered.)

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EXAMINING LEGAL ISSUES SURROUNDING REDEVELOPMENT, REPURPOSING AND REIMAGINING COMMERCIAL REAL ESTATE

John Rapasky and Mike Green of Counsel Mortgage were proud to attend and sponsor the Property Law Section seminar at the Arizona Bar Convention on Wednesday, June 29th, on Examining Legal Issues Surrounding Redevelopment, Repurposing and Reimagining Commercial Real Estate.  We sponsored this event prior to the pandemic, too.  It was nice to attend in person and reconnect with the other sponsors and attorneys.   Counsel Mortgage Group, LLC is a mortgage broker and brokers commercial and residential loans.  We shop wholesale lenders for wholesale rates and costs to pass the savings onto you.  We have been in business for...

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INVESTING IN CRE IN A HIGH INTEREST RATE ENVIRONMENT

Recent tightening monetary policy has brought to the forefront lenders utility of rate swaps and caps for CRE loans. With the stable interest rates of the past decade or so, these were largely kept in the closet. CRE investors have long had multiple avenues for hedging against rising interest rates. With the FED’s commitment to raising interest rates, however, renewed by higher-than-anticipated inflation, CRE lenders have brought these tools out as standard fare.   For investors with floating rate debt, there are two prominent tools (options) to hedge against rate climbs: an interest rate swap and a cap. A swap...

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