2015 MARKET UPDATE
Happy New Year
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The strong stock market rally at the end
of last year has been powered by an improving U.S. economy and an
unexpected drop in interest rates due to an increased flow of funds into US
Treasuries, as a result of geopolitical turmoil around the globe,
falling oil prices and key economies under stress in places like Europe,
Japan and China.
The Fed continues to signal that rates will remain low until the "real
unemployment rate" (U6) comes down further. U6 currently stands at
11.0%, down from a high of 17.1% in late 2009. So, there is a lot of
improvement, and at some point the FED is going to feel that there is
enough momentum in this direction to let rates begin to rise.
Here are a couple of links offering some good data on U6:
http://www.portalseven.com/employment/unemployment_rate_u6.jsp
http://unemploymentdata.com/current-u6-unemployment-rate/
Great news for consumers that the price of oil is low. Some experts believe
the price will drop to $45/brl and will remain their for a year. This is
clearly well below the break even threshold for Russia, Venezuela and many
US producers. It is going to be interesting to see how this geopolitical
game plays out and its impact on the global economy. In the US along,
it is estimated that this will put over $1 Trillion back in the hands of
consumers.
This dramatic drop in oil prices ($48/brl today) combined with Greece
threatening to leave the EU and default on their loans has resulted in an
incredible drop in Treasury yields, bottoming on January 6 at 1.84%,
and has many lenders backing off on quoting rates, or instituting
artificial floors until they see some stabilization in Treasury yields. At
the end of the day, this would appear to be a great time to lock up the
longest fixed rates you can find, as quickly as possible.
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$10,750,000
Life Company perm for a 182,000 SF
5-building industrial park in Vista, CA
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$10,000,000
Life Company perm for a 137,500 SF anchored shopping center
located in Escondido, CA
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$37,500,000
construction loan for a 144-room Residence Inn by Marriott
locate in Pasadena, CA
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$2,675,000
life company perm for a 50,576 SF 3-building
multi-tenant industrial park located in Fountain Valley, CA
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WESTCAP offers the ability to obtain loan sizes ranging from
$1,000,000 to $200,000,000 nationwide.
WESTCAP provides fixed and floating rate debt programs for a
variety of loan terms and purposes including long term permanent loans,
short term permanent loans, construction loans, mezzanine loans (including
construction mezzanine loans), bridge/rehab loans, as well as joint
venture equity placement for all types of income properties including:
Retail, Office, Medical
Office, Industrial, Self Storage
Multifamily, Senior Housing, Student Housing, Hospitality
WESTCAP serves as an exclusive &
semi-exclusive correspondent for over a dozen life insurance companies
and other sources of capital in order to meet all of our
client's financing needs. Many of these correspondent relationships
date back over 25 years.
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We are always available to discuss potential financing
and or equity requirements, or to provide a written quote to help
convince a seller that you, or your client, are the most qualified buyer.
We will also handle any size transaction, as we are interested
in establishing long-term relationships as early as possible.
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Steve
Bridges
Executive
Vice President
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