Don’t fear the peak: Real estate growth and Texas Commercial Lending slow but show no sign of crashing

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Don’t fear the peak: Real estate growth and Texas Commercial Lending slow but show no sign of crashing

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The Texas Commercial Lending market is slowing down but not to a crawl. Understanding how the industry is changing will help your business make smarter investments.

Earlier this year, multiple leading experts emphasized that 2017 was likely to be the peak of the current commercial real estate cycle and cautioned investors to account for this downturn as they planned out their strategies for the next few years. While these predictions were not inaccurate, the commercial real estate industry’s apparent landing has been considerably softer than expected.

Back in March, financial services firm Morgan Stanley predicted that 2017 would mark the end of the commercial real estate’s bull market, according to Business Insider. A Morgan Stanley forecast analysis noted that net operating income (NOI) for commercial real estate properties must continue to accelerate in order to keep the cycle from peaking.

While rent growth has continued to increase, the rate of that increase has slowed over the past few years. This behavior is notable as the market typically accelerates until it hits a peak, then trends sharply down. In some ways, this gradual rise and fall marks uncharted territory for the industry. With uncharted territory comes both greater risks and bigger opportunities.
Learning more about what to expect from the changing commercial real estate will put your company in the best position to make a successful investment. Here are two quick, important takeaways to help you wrap your head around both the future of both the real estate and the Texas Commercial Lending industries.

● Generational Factors Will Shift Demand – One important factor that will impact the future of the commercial real estate industry is the growing spending power of millennials. Much has been made of the rising generation’s preference for the flexibility of renting compared to a mortgage. In an article published by Finance & Commerce, Christopher Lee, CEO and president of CRE consulting firm CEL & Associates, pointed out that this generational shift in demand will keep the multifamily industry strong despite signs that the rest of the industry has begun to level out. How well your company works around these trends will dictate the success of your commercial real estate investments

● Great Opportunities Remain Plentiful – While sections of the market have begun to head into a gradual decline, there are still plenty of substantial opportunities available for commercial investors. The trick is to gain a strong grasp of how new market realities are reshaping the landscape of multifamily, retail, industrial and other sectors. Commercial Property Executive pointed out that demand continues to exceed supply in the recovering industrial sector, suggesting that this section of the market may buck broader trends for the foreseeable future.

Take Advantage Of The Strong Market Before It Passes The Peak For Good
Your business shouldn’t let the market forecast spook them away from making strategic commercial real estate investments. By working with a proven private lender, you can get access to capital necessary to take advantage of the current market.

Working with a private lender with experience in the local market can

help you identify potential real estate assets opportunities more efficiently.

Don’t pass up on an opportunity add a valuable asset to your company’s portfolio. You’ve got to act soon if you don’t want to miss your window.

Dennis Mortgage Broker ArizonaDennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:     (512) 516-1177 NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701


About the Author:  Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

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