February 2023: Expanding and Launching
Matheson Capital welcomes new team members and introduces investment opportunities: Summers Run in Asheboro, NC, and retail options. They focus on newer, stabilized properties. Recent bank collapses may alter financing landscape. Inflation at 6% in February shows improvement.
LATEST NEWS
Welcome to the Team!
Matheson Capital took a big step forward with two new hires in the month of February. We're thrilled to have both Alex Chapey and Corinne Bittner joining the team. Both join us with experience in commercial real estate, and they are already making a big impact in their first few weeks.
New Offering - Summers Run - Asheboro, NC
Last month, we launched our latest offering, Summers Run! This 112-unit community is Asheboro, NC (Triad NC MSA) is a phenomenal cash flowing asset complete with an incredible assumption loan (3.32% interest rate, 3.5+ years of remaining I/O, and 8.5+ years of term remaining). Most of the units also have original interiors, so there is value-add upside through renovations. In short, this investment offers an incredible combination of security and upside.
If you didn't see this opportunity already, check your spam folder (it was sent on February 23rd). If you want to learn more, let's connect.
Retail Investment Opportunity!
One of our most trusted advisors, an experienced sponsor with over 35 years in the industry, has a retail investment opportunity. If you are interested in diversifying into retail assets, please reach out and we'll make the connection.
WHAT WE ARE LOOKING FOR
No changes here. We want newer construction, stabilized / light value-add properties. Thanks to our new team members, we're looking at more opportunities than ever before!
WHAT WE ARE FINDING
There is still a significant gap between seller expectations and buyer appetites, but things may be changing. Every month interest rates remain elevated is another month closer to debt coming due. Not to sound like a broken record, but signs of distress are becoming more evident.
MARKET INSIGHTS
The Notorious SVB
I'll admit that I'd never heard of Silicon Valley Bank until last week (I'm not a tech guy), but I can confidently say I know about it now. With Signature Bank's failure on Sunday evening, we just witnessed the second and third largest bank collapses in US history.
While the news was very sudden, it was not entirely unpredictable (and to be clear, I'm not saying we predicted it). Back in October, UK pension nearly collapsed due to the dramatic hike in interest rates. So now that we've seen UK pensions nearly collapse and two bank failures, expectations are that the FED will be forced to pause rate hikes.
What does this mean for real estate? Some are saying that it will pull even more local and regional banks out of the marketplace, so the only available financing may be agency debt or life insurance company debt. Admittedly, we haven't seen competitive bank terms in months, so I'm not sure how big a change this is.
Inflation Update
The inflation news for February was surprisingly good. Prices only rose 6% from one year ago, which was the smallest monthly increase since September 2021. While 6% is still historically, terrible, it's relatively great given the past 24 months, so we'll take our wins where we can get them.
We're mostly just grateful that it's moving in the right direction. In light of the SVB news, the Fed would be in an even tougher spot if inflation were spiking, and banks were collapsing.
As always, we hope you've enjoyed this newsletter, and as always, please don't hesitate to reach out.