2/8/22 – Detroit Mastermind Group

Detroit February 2022- Key Takeaways

• Most members continue to report being very busy and expect the trend to continue. (Steve Sallen – Maddin Hauser, Mike Sabrosky – Oliver / Hatcher Construction, Dan Stys – Professional Engineering Associates)
• 10 year treasury up about 100 basis points from the past year.  Properties are selling at extremely low cap rates, which is making some deals not make sense.  Seeing more requests to find ways to bridge that gap. (Tom Barrett – The State Bank)
• There has been an increase in cannabis related real estate activity. (Nick Maloof – Associated Environmental Services, John Godwin – Marcus & Millichap)
• Mixed-use, multi-family and industrial remain strong.  Retail has been doing better and hospitality has improved. There is still lots of demand for warehouse, industrial, life sciences, medical and self storage.  (Nick Maloof – Associated Environmental Services, John Godwin – Marcus & Millichap, Paul Hacker – Axis Insurance Services, Brad Rosenberg – Mid-America Real Estate – Michigan, Inc., Mike Sabrosky – Oliver / Hatcher Construction)
• Inflation is coming, though it may be leveling off.  Rate increases are impacting deals but demand is still there. (John Godwin – Marcus & Millichap, Tom Barrett – The State Bank)
• Supply chain issues are changing the way deals are structured.  Requires better communication, more transparency and updated legal terms.  (Mike Sabrosky – Oliver / Hatcher Construction, Phil Seaver – ATA National Title)
• There are more opportunities in renewable energies. (Dan Stys – Professional Engineering Associates, Brad Rosenberg – Mid-America Real Estate – Michigan, Inc.)
• Rate fluctuations are changing the way deals get done.  Some companies are overstretching to get into the Michigan markets. (Dave Dismondy – District Capital)
• Healthcare real estate has been active with several large deals getting done in the area and there has been an increase in urgent care facilities as part of retail development. (Matt Fenster – Etkin Real Estate Solutions, Brad Rosenberg – Mid-America Real Estate – Michigan, Inc.)
• Labor shortages continue to be an issue, including issues arising from suppliers. (Matteo Passalacqua – Etkin Real Estate Solutions)
• There is less Covid chatter in general, with tenants showing less concern about mitigation measures, but also less willing to report positive cases. (Matteo Passalacqua – Etkin Real Estate Solutions)
• Not a lot of new houses coming onto the market, in part due to loans being restructured instead of foreclosing which leaves homeowners able to keep their homes but unable to sell them.  Seniors are also choosing not to leave their homes due to Covid and the availability of services. (Phil Seaver – ATA National Title)
• Cyber fraud continues to be a concern though attempts have leveled off.  It’s important to have two-factor authentication and other protocols in place to prevent fraud.  It may also be necessary to improve cyber safety to obtain cyber insurance. (Phil Seaver – ATA National Title, Paul Hacker – Axis Insurance Services – visiting Member from New Jersey)