Updated over 3 years ago on .
Commercial is Still Going STRONG!
The quality and quantity of the deals I have been getting have been amazing and it is mostly growth-start-up franchises, and strong businesses buying buildings expanding. There is strength out there and the rise in rates is not stopping that in the commercial world the way it has affected residential. This means, for the first time that I can ever remember, commercial mortgage rates are close to residential mortgage rates.
Don’t know if it will last for long, but it is definitely still a good market in commercial. We are very busy. I hear from Realtors that the residential market is still busy despite the rate increases. My neighbor put his home up for sale last week and had 8 showings over the weekend and 6 offers. So the market is still strong despite the rates.
The reason the residential rates went up so much is that the SPREADS increased as well as the interest rate. So the 10-year treasury, which is the key benchmark, has gone up over 1% in the last month or so. Yet, mortgage rates went up even more. The reason is the spread, the buyers of the mortgage-backed securities, seeing an aggressive Federal Reserve and a lot of potential disruptions, are requiring a higher spread to compensate for the perceived risk going forward. This is interesting to keep in mind. The big money is assuming continued rate increases and
continued volatility and risk.
I don’t believe in a “one size fits all” investment strategy. Each person is different. But a lot of money, big money, is looking for a place to deploy it. Commercial Real Estate gives a nice hedge…inflation should be good for fixed assets and businesses are still doing well financially. Having a solid fixed real asset underneath. Not a bad play. If you are looking to buy or pull cash out, give me a call. I can do a pre-approval for the buyer OR the seller. And it is FREE! Call Karen at 512-358-1511 today or get started by filling out this form!
Karen Schimpf
Commercial Capital Ltd
(512)-359-358-1511
karenschimpf at applycommercialloans.com
www.ApplyCommercialLoans.com
Give me a CALL TODAY at 512-358-1511 or get started by filling out this form!