We saw the 10-year yield drop again this past week. At this point, several factors are keeping pressure on rates to the downside. These include:
- The Stock Market woes
- Brexit issues
- Fear of an economic slowdown here and abroad
Newsletter Feedback Request and Thoughts on Improving:
First, I would like to get a little feedback on this weekly note. I have for the past year provided an area below intended to educate regarding commercial net lease investments throughout the US. If this is of little value, then I am happy to omit the information and focus on the 10-year yield and any observations that I may have that I hope is beneficial. So, thank you in advance for any comments you might have on this topic.
Okay, now to the overall real estate market. Clearly, things have slowed down for those associated with the RE industry. I still share the same advice as I always have. Get better; and hone all of your skills, connections and business partners to attract business (even in a perceived slower market).
I have suggested that you meet with more people. Go deeper with your questions to see if these business partners are providing the kind of service that leads to maximum referrals and introductions. Come up with questions that will force discussions to illustrate potential weaknesses and strengths. Anyone can say how great they are, but it does take some insight to determine really who is strong and who just talks a good game.
My conclusion through the years is that many settle for mediocrity. If you want to be better for your clients, then work with the best business partners that you can. Be that great resource that is sought out due to what value you provide.
Okay, that is enough for now. If you want to dig deeper into this subject, then feel free to set up a meeting with me. In the meantime, please have a safe and fun Thanksgiving with friends and family.
Investments Opportunities for Purchase with Strong Cash Flow:
Back on the January 15th update, I wrote about “Creating Residential Listings Using Commercial Opportunities.” Each week, I am presenting some of those investment opportunities to better educate all on what is actually available. Note that these are all Single Tenant Net Leased properties that have listed in about the last 10 days. In addition, I assumed a 5.50% loan with 50% down. This is just a small sample of what is actually available.
If you assume investors in the Bay Area are getting a cash flow of 3.5%, then you can see the potential improvement with these properties above. This approach is great for the investors desiring increased cash flow, an opportunity to get out of daily property management, and/or taking the challenges of rent control off the table. Should you wish to discuss any of these or others, then give me a call.
That’s it for this week. As always, feel free to give me a call with any of your strategic financing needs.
Articles of Interest:
The Harvard Business Review shared “If You Want to Get Better at Something, Ask Yourself These Two Questions.”
Commercial Property Executive reported “CRE Pricing Shows 1st Monthly Drop Since January.”
Builder reported “REAL ESTATE DISRUPTER IN SAN FRANCISCO LAYS OFF STAFF.”
Reuters reported “Dollar, U.S. yields slide on Fed official rate talk.”
See the table below for approximate interest rates.
|Apartments||4.555% – 5.170%||3 to 10 year (30 yr amortization)|
|Commercial||4.865% – 5.470%||3 to 10 year (25 yr amortization)|
|SBA Lending||Call for Options||Call for Options|