$5,000,000 Refinance of a Retail Strip Center in the City of Industry, California.
FINANCED Hacienda Valley
Property Type: Retail
Lender: Life Insurance Company City: City of Industry, California Size: 27,461 SF Term: 10-year term, 25-year amortization
Kostas Kavayiotidis and Matthew Farzinpour of PSRS arranged the $5 million refinance of a retail strip center in City of Industry, California. The subject collateral is a part of the Hacienda Valley Shopping Center and is shadow-anchored by Superior Grocers supermarket. The subject collateral is occupied by Denny’s, See’s Candy, Chipotle, Subway, and Wells Fargo, among other tenants. The total square footage of the site is 27,461 SF on 2.70 acres. Financed with one of our correspondent life insurance companies, PSRS provided its borrower a 10-year loan with a 25-year amortization.
Interest Rate Market Update
Current 10-Year Treasury Yield: At 4.35%, moving to the low end of the recent range following a bond-friendly April PCE inflation print on Friday (5/31) and a weaker-than-expected ISM Manufacturing Index print on Monday (6/3).
Weekly Yield Movement: Early last week, yields rose to 4.61% due to tepid demand for bonds auctioned by the US Treasury, but have since decreased with refocused investor sentiment on better inflation numbers and weaker economic data.
April PCE Inflation Data: The year-over-year headline PCE index printed at +2.7%, with annual Core PCE at +2.8%. Monthly Core PCE was +0.2%, a positive sign compared to earlier months' higher prints, yet still requiring further improvement for Fed rate cuts.
May ISM Manufacturing Index: The index came in at 48.7, indicating economic contraction and falling short of Wall Street’s expectation of 49.6.
Fed's Policy Outlook: Since July 2023, the Fed has maintained a restrictive overnight Fed Funds rate of 5.25%-5.50%. Rate cuts depend on either improved inflation or a weakening economy. Inflation needs to consistently print at +0.2% month-over-month, or the unemployment rate must rise above 4.1% for rate cuts to be considered.
Economic Data Focus: This week includes key employment figures, highlighted by the US Employment Report on Friday (6/7) with expectations of +190,000 new non-farm payroll jobs and an unemployment rate of 3.9%. Other significant data includes the JOLTS Job Openings report on Tuesday (6/4), the ADP Jobs report on Wednesday (6/5), and Weekly Initial Jobless Claims on Thursday (6/6). The bond market will also monitor the Average Hourly Earnings report on Friday, expected to show a +0.3% increase month-over-month.
About PSRS Founded in 1972, PSRS is a commercial mortgage banking firm that helps real estate investors of all sizes structure and secure financing solutions that align with their investment goals.
