February 14, 2020
By Money360’s Gary Bechtel
Q: What do you see on the horizon in 2020 from a financial lending perspective in commercial real estate?
A: I expect 2020 lending activity will rival what we saw in 2019, though it should be noted there’s a likely increase in the number of lenders and available capital in the market. That said, we expect challenges, some of which we’ve already started to see that will continue throughout the year. One such issue is more aggressive underwriting by some groups. That could potentially place their companies, borrowers and investors at risk in the event of a future weakening in the larger real estate markets. A key consideration in the bridge space is borrowers need to know that their lender will be there to fund loan requests in the future so that they can successfully implement their business plans.
Q: What are some of the intriguing opportunities you are pursing this year?
A: Our primary bridge program will continue to be a focus for Money360. But I see increased opportunities in 2020 for our “Value-Add” program that borrowers tap for properties that require extensive capital improvement, re-tenanting, repositioning, etc. There’s been a surge already in these types of requests since we rolled out the program Q4 2019.
Q: Can you describe Money360’s lending strategy, and how it has evolved to meet client or market demand?
A: In addition to the bridge and “Value-Add” programs mentioned earlier, we are also considering multifamily deals in markets with populations as small as 50,000 within a three- to five-mile radius of the subject property, rather than markets with populations of 100,000 people in 2019. We will also look to expand financing in under-served markets via our M360 Community Development Fund.
Q: What CRE property sector do you expect to see increased levels of activity in 2020, and why?
A: Three property classes, multifamily, industrial and office, will experience continued levels of interest this year. That’s because strong market fundamentals exist in most U.S. markets. We’re continuing to see a lack of affordable and workforce housing, and that will drive the multifamily sector. Self-Storage and manufactured housing will also continue to be strong performers within certain markets. The struggles faced by the retail and hospitality sectors will cause a number of capital providers, including Money360, to re-think or reduce their positions on those asset classes.
For comments, questions or concerns, please contact Dennis Kaiser