Scotsman Guide > Commercial > June 2019 > Department

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Commercial Department: From The Editor: June 2019

 

From The Editor

Is the slow start to 2019 a sign of things to come?

c_2019-06_FTEAs hard as this is to believe, we have arrived at the midway point of 2019. There was some unsettling news released this past spring, however, about the commercial real estate market. Preliminary data for first-quarter 2019 from Real Capital Analytics (RCA) suggested that sales of significant commercial properties valued at more than $2.5 million declined by 11 percent year over year. The only asset classes that didn’t see a sales decline during that time frame were apartments and senior housing.

Admittedly, that’s not a good sign for commercial mortgage brokers. Then again, one quarter’s worth of data doesn’t reveal much about the year as a whole. Most experts have been predicting another solid year in 2019 for the commercial market, both in terms of sales and origination volumes. In this month’s Q&A on Page 20, former National Association of Realtors economist George Ratiu told me that investors are eager to buy commercial properties, but in numerous cities, there aren’t many properties available to purchase.

In a note accompanying the release of the first-quarter numbers, RCA analyst Jim Costello noted that the slowdown in sales volume may be a temporary blip caused by the uncertainty over interest rates at the end of 2018. The Federal Reserve has now clearly signaled that it won’t be raising rates multiple times this year. That certainty may get more buyers and sellers back to the table. Sales data for the second quarter won’t roll in until later in the summer, so we should have a better idea then of how the year is shaking out.

Turning to our June edition and its focus on alternative lending, we have a diverse lineup of topics this month. New author David Krebs of DA Krebs Inc. gets us started on Page 31 by making the case for co-brokering challenging loans. In “Two Heads Can Be Better Than One,” Krebs says you often can serve your clients well by working with another broker on deals that don’t fall precisely within your comfort zone.

In “The Truth About Hard Money” on Page 42, new author David Crantz of LendTerra separates truth from fiction when it comes to commercial hard money loans. In “Seven Habits to Live By” on Page 50, previous author Garry Barnes of PW Partners Consultancy returns with tips for providing quality service to borrowers and lenders.

In “Go Ninja Against Cybercrime” on Page 60, new author Jeff Bernstein of Critical Defence explains why commercial mortgage brokers need an ever-expanding toolkit to face the dark world of hackers. In “Working in a New Frontier of Opportunity” on Page 78, previous author Jeffrey Wolfer of Silver Arch Capital Partners discusses how private lenders and their broker partners can help revitalize distressed neighborhoods in newly created opportunity zones.

And on Page 83, returning author Paul Rahimian of Parkview Financial discusses supply and demand trends for apartments in “Tap Into the Multifamily Ecosystem.”

There is much to digest here. Thanks for reading and, as always, I welcome your comments and suggestions.


 

Victor Whitman is editor of Scotsman Guide Commercial Edition. Reach him at (800) 297-6061 or victorw@scotsmanguide.com.

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