Editor’s Insights: Stay Sharp with Actionable Insights!
After a mostly gloomy year, the sun peeked out from the clouds in mid-December for commercial real estate lending. 2023 was largely defined by uncertainty over how high the Federal Reserve would raise interest rates; the commercial real estate market suddenly got a boost on Dec. 13 when the central bank indicated that its hawkish strategy fighting inflation was done, and multiple rate cuts were on the table for 2024.
Decisions to invest and to lend are the driving forces in real estate. Developers only act if convinced that a new property will be profitable and meet their investment objectives. When existing properties change hands, the buyer and seller must decide that the price, with transaction costs, fits their goals. Lenders will only put up money if they believe their chances of being repaid, either by the borrower or through foreclosure, are high.
That’s why I say, “Stay sharp with actionable insights!” It’s what we strive to achieve with the Trend Report each month.
We thank our issue sponsor, The Bain Law Firm, PLLC, and Jody Bain for her Tax Valuation expertise as a real estate attorney in Grit Prevails! Impacts of Real Property Management
Sandra Barton, Senior Director of Commercial Real Estate at Alliance Bank of Arizona, starts the issue by Charting the Course for Southern Arizona’s 2024 Commercial Real Estate Landscape. We appreciate her top tips for Strategic Real Estate investment in 2024.
We welcome Tim Story of Gantry, a first-time contributor, with Arizona Shows Positive Trajectory in 2024 with Strong Economic Fundamentals, even if the pace of recent years may be cooling.
The CBRE Debt and Structured Finance Group of Kevin Prouty, Tim Prouty, Theresa Witz, and Brian Prouty maintain Anything is Financeable Today – Dependent on Terms are expecting the largest change to the lending market will result from expected maturities due this year.
In Rubber, Meet Road, Scott Stovall, SVP at National Bank of Arizona, discusses the “price tear” housing has been on since mid-2020 and lost its steam as values are falling in once-hot major markets and are expected to spill over to secondary markets in 2024.
This brings us to Addressing the Lot Supply/Demand Imbalance by Carter Froelich, CPA, and Pam Giss of Launch Development Finance Advisors. Providing infrastructure to new homes has drastically increased, 112% in the Phoenix MSA, which doesn’t help the housing shortage and explores community facilities districts (CFDs) and revitalization districts (RDs) to assist.
David Hrizak, CEO of Streamline Capital Group, is another new contributor. Navigating the Metro Phoenix Class B Real Estate Market explains their success in the Class B real estate sector and the value-add opportunities it brings.
Eric Freeman, CPA and Principal at BeachFleischman, PLLC, says when talking about government reporting required of small businesses: Strap on your Floaties, The Water is Rising!
In 2024 Financing Outlook and Life Company Lending, Cynthia Hammond with Churchill Commercial Capital further explains the LC lending for commercial real estate this year.
Ellie Perlman, Founder of Massachusett-based Blue Lake Capital, is new to Arizona investments and shares her firm’s market research in Net Migration and What it Means for Multifamily Investors.
Another first-timer is Jonathan Spurr, Founder of Inspired Life Mortgage, who gives his take on residential lending today in Tucson’s Housing Shortage Expected to Continue – Could Cost You Money!
We sincerely thank everyone who contributed to this Trend Report issue. Without the involvement of individuals sharing their knowledge and time, these reports would not be possible.
We also thank our Trend Report team: Patti van Leer, Michael Rossmann, Melissa Vucijevic, and Jack Paddock.
We’ve started work on the March “Residential Development” issue, where we will try to answer the questions: Why is there a Housing Shortage, and What’s Being Done About it?
We also thank you, our readers, for your continued support. As always, we appreciate your feedback and welcome your comments.
Stay Sharp with Actionable Insights!
Karen Schutte,
Trend Report
Managing Editor