Are we in a recession?

Every commercial real estate professional in Washington knows that we are in an economic downturn – the likes of which many of us have never seen.  Real estate investors are paralyzed by fear – afraid to make any kind of move with their investment properties or portfolios.

Is that the intelligent, profitable response to this financial crisis?

For many of your commercial property clients, especially investors with significant equity in their currently held investment properties, this is the opposite reaction they should be taking in light of this current economic crisis.

Why?

Bargains will be surfacing and CASH will be king.  Investors with cash will be the main beneficiaries of the current downturn and will be able to ride in on the inevitable recovery, which some see occurring in 2010.

What should you be advising your clients to do right now?

The message is clear: If you or your clients have equity in properties that can be converted to cash for potential future commercial property purchases, NOW is the time to refinance.  Interest rates continue to be at HISTORICAL LOWS.  Financing is available, especially in your area.  You CAN position yourself to make great gains in this current economy – gains you’ll hold onto after the recession is a memory.

Look at what some of our clients are doing with us right now – and why:

·         A client refinancing a 171-unit multifamily property – taking over $3M cash out to position themselves for a future purchase.  10-year fixed interest rate at or below 6%.

·         A client refinancing a 96-unit multifamily property – taking over $1.6M cash out to pay off other, more expensive debt.  10-year fixed interest rate at or below 6%.

·         A client refinancing a medical office building  – converting the existing 8% interest rate to a new fixed rate of 6.50%

·         A developer refinancing a  recently completed 28-unit multifamily property – paying off the construction financing and placing a new 10-year fixed rate loan on the property at 6%

These clients are either pulling cash out of their properties right now in order to take advantage of future opportunities – OR they are convinced that interest rates are only going to go up as the economy improves and are taking advantage of very low rates right now.

Call us if you or a client of yours is interested in joining this group of opportunistic investors and want to explore taking equity out of a property you own or re-positioning the current debt on a property at a lower rate of interest.  We are one of the few remaining commercial mortgage companies anywhere in the west that can still provide our clients with extremely competitive commercial financing.