6A —March 18 - April 21, 2022 — M id A tlantic Real Estate Journal
www.marej.com
M id A tlantic R eal E state J ournal By Michael H. Claisse, Senior VP/ Director of Commercial Real Estate Lending The current state of the financial market
I
the world economy, including the commercial real estate industry. The current war in Ukraine has created additional economic turmoil. At Spencer, we are adjusting to a new envi- ronment, one with the potential of becoming very volatile and uncertain. We never imagined that we would see empty office buildings, mass layoffs, reduced store hours, travel bans - an empty New York City. The retail industry, struggling pre- pandemic, was certainly not bolstered by the ecommerce surge of online spending. Gyms and restaurants closed down, some permanently. Strip malls, a staple for Spencer, saw in- creased vacancies as businesses shut down temporarily and/or went out of business. At Spen- cer, we remain cognizant of this but will not let it deter us. We remain very active in the lending arena, with a slightly modified approach. We have always practiced a conserva- tive underwriting style, a key to building a stable real estate portfolio. Spencer monitors market metrics, leaving room for potential issues, but we pride ourselves on the ability to adjust based on borrower financial or other pertinent
information. Analyzing the current economy and near future, retail will never fully go away because people want places to visit and things to touch. Strip centers are still of interest to us as their tenants are often times uniquely positioned against e-commerce, selling prod- ucts and services typically not sold online. These neighborhood retail stores continue to fill a need, and we continue to pursue those options selectively. In the e-commerce revolu- tion, the trend we are seeing now is strong interest in indus- trial warehouse and flex build - ings. Demand for flex industrial assets is very strong. However, there is still risk involved and while we recognize the need, Spencer will always keep our standards tight. Lending on general office buildings is generally outside of our appetite at this time, with rare exception. There is a reduction in occupier demand, but the home working trend acceleration has also revealed its limitations. Despite the weakened demand, there con- tinues to be a need for people to collaborate and meet in person, as well as mentor one another. continued on page 16A
t’s been a whirlwind two years for the commercial real estate industry, due
to the pan- demic. How- ever, despite much of the global econ- omy l o s i ng steam as Co- vid persisted and the in- dustry as a whole taking
Michael H. Claisse
a big hit, the last couple of years at Spencer have been some of the most robust. We saw not only opportunity, but felt we had a responsibil- ity to continue our lending platform throughout 2020 and 2021 taking into account this tumultuous time of uncertain- ty, and having record growth, with minimal delinquencies and no recorded losses. In fact, according to a recent 2021 NJ Bank Performance Report by the Financial Management Consulting Group, Spencer had the highest loan growth rate of all 56 banks in the survey. Even with tightening our underwrit- ing metrics, given the uncertain times, this is something of which we are very proud. The pandemic has changed
8% Preferred Return* Debt- Free
TIRED OF STOCK MARKET VOLATILITY? Looking for Monthly Income Potential?
COVE NET LEASE INCOME FUND 18, LLC
WHY YOU SHOULD INVEST WITH COVE: √ Corporate backed net leases √ Lower Risk via All-Cash/Debt-Free √ Diversification amongst tenants, industries, asset classes and geography √ Tax advantages flow through to investors √ 8% preferred return* FOR MORE DETAILS covemidatlantic.com 1 (866) 847-7163 info@covecapitalinvestments.com
INVESTMENT HIGHLIGHTS: √ All-Cash/Debt Free Fund — No long-term mortgages √ Offering Size: $50,000,000 √ As Low as $50,000 to Start √ 8% Preferred Return* √ Flow Through of T ax Benefits to Investors √ Corporate Backed Net Leases with tenants such as FedEx,Walgreens, Amazon, Fresenius, Dollar General & More!
covemidatlantic.com | info@covecapitalinvestments.com 1 (866) 847-7163
*This is a Regulation D Rule 506 (c) offering. All real estate and DST investments carry the risk of a complete loss of invested capital and that returns/ cash fl ow/appreciation/ distributions are not guaranteed and could be lower than anticipated. Preferred Returns are not guaranteed. Securities offered through FNEX Capital member FINRA, SIPC. Potential returns and appreciation are never guaranteed and loss of principal is possible. Please speak with your CPA and attorney for tax and legal advice.
Made with FlippingBook - Online catalogs