TOP TAKEAWAYS: CALIFORNIA MBA’S 2024 WESTERN STATES CREF

The following are Slatt Capital’s primary takeaways from this week’s California MBA’s 2024 Western States CREF Conference held at the Aria Hotel & Casino in Las Vegas, Nevada.

• Over 800 commercial real estate professionals attended in total. The attendees and panelists expressed a positive perspective about commercial real estate lending space for the remainder of 2024 and the year ahead. The mood/energy at the conference as a whole was great.
• Multi-family, Industrial, multi-tenant Retail, and Hospitality are in favor with lenders. Office products continue to be untouchable by many lenders; however, there has been an increase in lenders quoting straightforward office deals.
• Private debt funds have stepped up to fill the void left by the banking industry failures earlier in the year.
• Commercial real estate cap rates have increased 50-100 bps from Q2 2021 to Q2 2024, depending on property type.
• The Mortgage Bankers Association (MBA) expects lending to steadily increase from $429B in 2023 to $725B in 2026.
• Insurance availability and affordability continue to be a huge challenge.  Determining how to escrow for insurance is difficult as premiums have increased so significantly in the last several years (doubling and even tripling in some instances).
• It is important to start conversations with borrowers early on payoff or refinance options, as the “wall of maturities” is real (with $929B in CRE debt maturing in 2024 alone).
• Some have seen a slight uptick in assumption requests as there is a desire to hang on to the lower interest rates that no longer exist in the current market.
• Building a strong network of peers can be particularly important for women in CRE. Obtaining professional designations and participating in organizations like CREW, ULI, MBA and CMBA can help develop this network.
• Getting more creative with deal structure has proved an effective strategy for getting transactions to the finish line in the current climate.

We would like to thank everyone at the California MBA for hosting such a wonderful event, and we look forward to seeing everyone next year.