The 2020 Market Ahead!December 19, 2019 • Author: Howard Taylor
Most certainly, without a severe uptick in rates, we shouldn’t see much of a severe CRE value issue. With cap rates rising slightly in 2020, the marginal delta of the increase will most likely be absorbed by the rent increases.
We expect anchored retail to remain strong, despite the continued growth of online shopping, as local space keeps being absorbed by service tenants, restaurants, insurance storefronts, CBD oil locations, etc.
Sunshine states will continue growing as taxes remain low or zero.
Northeast and Midwest rust belt states will continue to lose population, as service jobs income tries, but fails to replace manufacturing and high-tech jobs.
Lenders will continue to not only watch their “buckets” for property type but be more mindful of hotels and other food groups that can be affected by an economic downturn. Lenders will continue to and rightly so, demand that documentation be aligned with S&U and projected operating costs presented by borrowers. We expect the refinance market to be brisk, as a plethora of construction projects hit stabilization, after some seasoning that is both market and project-driven.
Borrowers will have to be more creative in their approach to development as equity requirements are not expected to narrow.
We are expecting those who qualify by experience, track record and reporting prowess to continue to be top clients of Crowd Funding firms.
Even many experienced top tier developers are finding a niche for “fill in” equity via Crowd Funding. Griffin consults in the Crowd Funding arena and has had success closing with projects using Crowd Funding. This arena is a much more efficient means than friends and family and or country club equity.