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California  + Orange County  + Retail  | 

Chase’s Kevin Pleasant: Investing for the Long-Term, Build Strong Balance Sheet

By Dennis Kaiser

Connect Orange County is just around the corner. The annual gathering is set for August 22nd at The Resort at Pelican Hill in Newport Coast. More information about the event and registration details can be found here.

Connect Media asked Kevin Pleasant, West Region Head, Chase Commercial Term Lending, to share a few insights about the trends driving the market, strategies at play, as well as what deals are getting completed at this point in the cycle. Check out his responses in our latest 3 CRE Q&A.

Q: What are the overall trends you see playing out in Orange County so far this year? Is there runway left or should companies prepare for a downturn?
A:
We’re seeing strong market fundamentals for the industrial and retail markets, with solid demand and lack of supply. Retail ground-up development has slowed, as builders begin the process of transforming vacant anchor space in malls and big box stores across the metro area. Vacancy across the industrial market in Orange County is at near historical lows. The office sector is on par with the national vacancy rate, with rent growth continuing to outpace the national average, however, sales volume has been slower this year. We’re also seeing strong multifamily fundamentals in Orange County, vacancy remaining below 5% through 2020, according to CoStar.

We continue to monitor the real estate environment for signs of slowing.

Q: How are CRE investors adjusting their decisions based on those factors, and how should they be?
A:
With uncertainty surrounding the end of the cycle, developers and investors are focused on a long-term approach to investing and taking the necessary steps to build a strong balance sheet. That said, many investors are improving the efficiencies of their properties, maintaining moderate to low debt levels and reducing expenses where possible. Those investors seeking “cash-out” refinances are not only looking to redeploy capital today, but saving for investment opportunities that may present themselves during a downturn.

Q: What are some examples of deals you’ve seen that reflect the market realities?
A:
With the notable decline of interest rates since the beginning of the year, investors are weighing whether or not it makes financial sense to incur the cost of paying the prepayment penalty associated with their existing loans in an effort to lock-in today’s low interest rates.

The common theme we’re seeing across most deals is that investors are not looking to over-leverage. Recently we refinanced an industrial loan in Lake Forest for a long-term owner. While the developer received a significant amount of proceeds, the property still maintained a sub 40% loan to value.


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About Dennis Kaiser

Dennis Kaiser is Vice President of Content and Public Relations for Connect Commercial Real Estate. Dennis is a communications leader with more than 30 years of experience including as a journalist and in corporate and agency marketing communications roles. He is responsible for Connect’s client content operations and is involved in a range of initiatives ranging from content strategy, message development, copywriting, media relations, social media and content marketing services. In his most recent corporate communications roles, he led a regional public relations effort across Southern California for CBRE, played a key marketing role on JLL’s national retail team, and was responsible for directing the global public relations effort at ValleyCrest, the nation’s largest commercial landscape services company. In addition to his vast commercial real estate experience, Dennis has worked on communications and launch strategies for a number of residential projects such as Disney’s Celebration in Florida, Ritter Ranch in Palmdale California (7,200 homes, 22,000 acres), WaterColor in Florida and PremierGarage in Phoenix. Dennis’s agency background included firms such as Idea Hall and Macy + Associates. He has earned an outstanding reputation with organization leaders as a trusted advisor, strategic program implementer, consensus builder and exceptional collaborator. Dennis has developed and managed national communications programs for Fortune 500 companies to start-ups, both public and private. He’s successfully worked with journalists across the globe representing clients involved in major-breaking news stories, product launches, media tours, and company news announcements. Dennis has been involved in a host of charitable and community organizations including the American Cancer Society, Easter Seals, BoyScouts, Chrysalis Foundation, Freedom For Life, HOLA, L.A.’s BEST, Reach Out and Read, Super Bowl Host Committee, and Thunderbirds Charities.

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