The economy is in a tailspin, the US stock market keeps reaching new lows, credit markets are operating at a trickle, and the real estate market is a mess, but NWJ Cos closed on a deal last week and is preparing to close on another large refinance this week. I would not say things are easy by any means but we are getting deals done because these are the times when a good operator like NWJ Cos can flourish.
The lenders want to see fundamental based deals and that is how our model has been running for years. In the recent past we were being outbid by everyone because the deals were based on the speculate / future sale value of the property and not the investment / hold value. Now the tide has turned and only value investors are going to be able to operate, get finance and make deals in this current market. This creates tremendous opportunities for us to grow.
These opportunities are not going to come without problems. The market is taking big hits in values right now; the consensus is that real estate values have fallen 10-25% over the past 12 months. This obviously affects the valuation of our company. This makes it even more important for our operations group to produce good returns from our existing assets and move the properties along until the next real estate upswing.
Fortunately, we have spent considerable money and time over the past few years developing our management team and our brand identity. It is in times like these that investments should pay off nicely. The challenge will be to continue the growth of the brand and to improve the profitability of the assets in times of very low economic growth in the economy. I feel confident that we have the right people in place to take our buildings to the next level and keep the ship steady during these turbulent times.
I also am looking forward to the growth opportunities available to us in these turbulent times.
Please see the press release below.
Thanks for making it happen!
Nick
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