Don't Wait for Rates to Drop

Hi LinkedIn Peers,

Welcome back to my newsletter. I want to share a word of warning, encouragement, and inspiration as we enter May and an ongoing period of high rates.

The Fed isn't changing its stance, and it's anyone's guess when cuts will happen.

Many CRE stakeholders are waiting for rates to drop before making their next move. That makes sense on the surface, as we want to avoid further risk and preserve what we have.

However, the reality of staying afloat and reaching profitable new shores is counterintuitive.

With expenses, values, and cap rates on the rise and monetary policy-resistant inflation, what feels like standing still is sliding back into a weaker position.

We must act now to keep operations producing positive cash flow and make the most selective and prudent acquisitions.?

The good news is we've seen far worse as an industry, and many operators and investors are still generating alpha and achieving growth.

How can you make the best strategic moves that defy market conditions?

• Keep a positive, problem-solving attitude — be a scientist and detective.
• Gather every bit of market and asset performance data available (internal and benchmark).
• Leverage artificial, building, and human intelligence to collect and interpret the data.
• Reevaluate and continuously refine your game plan to capitalize on opportunities and mitigate risks presented by evolving market conditions.
• Focus on optimizing expenses, cash flow, debt, and equity.
• Study and monitor the forward curve and temper the perspectives of the media and economists with the insights and experience of your team.?

There is a way forward, and you'll find it through persistence, situational awareness, and data-informed action.

What do you see on the horizon??

If you're achieving growth or holding steady, share your story and best strategies.

Learn more market-beating approaches in my WSJ Bestseller, Beyond the Building.

New Content

I'm excited to share my latest feature in Authority Magazine, where I discuss the innovative approaches we're taking at Thirty Capital to disrupt the commercial real estate industry. From integrating cutting-edge technology to enhancing operational efficiency, we're setting new standards. Check out the full interview here:?Driving Disruption.

I also had the opportunity to share my insights with Darrin Gross on the Commercial Real Estate Pro Network podcast, where we discussed the essential strategy shifts needed for CRE owners and asset managers in today's evolving markets. Watch the full discussion here: CRE Owners Operations Challenges.

In the face of a significant challenge known as the "wall of maturities," where a staggering $2.6 trillion in commercial mortgages will mature over the next four years, I recently wrote an article for Scotsman Guide Commercial. This piece discusses strategic approaches that commercial mortgage brokers and borrowers can employ to navigate this looming crisis. Read the details of these strategies here: Scale the Wall of Maturities.

If you missed it, you can still catch our recent webinar, the 'Thriving to '25 GlobeSt. Webcast,' in which my team and I address strategies to prosper through the current market and come out on top in 2025.??

Weekly Capital Market Update?

Last week, yet again, we saw more of the same trends in the capital markets. It was a bit of a bear steepener, with rates moving up across the curve. 2-year Swap rates rose 3 BPS, and 10-year Swaps rose 5 BPS. It's worth noting that 2-year Swaps are now 18 BPS off their recent highs from October. This rate drives a ton of what we see in the market daily. With inflation firmly back on the radar, we've come full circle from the Fed finishing their hiking cycle.

GDP figures on Thursday came in lighter than expected, but there tend to be heavy revisions with the 2nd and 3rd ratings. More so than the headline numbers, the market was spooked by the GDP Price Index figures that showed a considerable acceleration of inflation in the 1st quarter.

On Friday, PCE annualized numbers came in a bit higher than expected. It wasn't a shocking increase, but what's significant is that we're moving in the wrong direction. The Fed is looking for a move closer to 2%.

For the latest information and tailored advisement, contact my teams at Thirty Capital Financial and Thirty Capital Performance Group.

Enjoying my newsletter? Please let your peers know about it!

?

Best,

Rob Finlay