9/13/22 Washington, DC Mastermind Meeting

Adam Silverman – Long Home Products:
Manufacturers have increased prices and reduced the diversity of products by focusing on more mass production to meet demand.
Pricing is difficult as it is unknown how this would impact demand. A higher inflation rate may mean less margin and manufacturers may just eat it. However, there remain unavoidable cost pass alongs catalyzing price movement and reducing price stickiness.
13k-20k renovation ticket average among efficiency buyers. Most work is financed with a payment factor of 1.3-1.5. As income reduces, people who fail A-B-C creditors debt-to-income ratios are very willing to buy if approved.
Asphalt shingles and siding companies have recovered per the manufacturing reduction of variety and with some building of factories.
No significant permit issues due to the scale of the company.
Harry Dematatis – NAI KLNB:
East Coast companies have had a good push to return back to the offices.
West Coast offices seem to have a tech-enabled absence of a return to the office.
Trends from larger tenants: we are starting to see more increase than velocity from these tenants.  
Brian Ball – NAI KLNB: 
Still seeing a basic tenant improvement package of 80$ft / 5 yr for a regular office space with some glass and a kitchenette.
Landlord brokers are going to have to keep rates where they are and need to meet the abatement market (2 months off per year of the lease.)
Money is still available in the mid-5 % range. With the last 30 years in this industry, this is not a bad rate. However, there is a difficulty as people want a spread of 300 points. People want cap rate pressure and this may mean a lower price.
Mark Tasker – NAI KLNB
Medical appears as one of the most active tenants on the market.
Gainesville is looking at retail to healthcare transition. There are concerns about the rates.  
Vacancies seem to be very low: indicated by a 50,000 square-foot client that only had two spaces to look at.
Derek Ford – Washington DC Economic Partnership:
While DC is making efforts to get people back, there remains to be dissonance between agencies’ return to office plans.
At the partnership, there is a focus on corporate attraction. From within, there may not be incentives to attract major companies. A deal-by-deal structure remains the MO of the city council.
With recent crime statistics, there has been a damper on the attractiveness of the city.
WMATA has the ability to do eminent domain. There is interest in density over Amtrak, the funds are there with the presidential interest in Amtrak.  However, a timetable for this is not clear.
Charlotte Troup Leighton – Chicago Title NCS:
200 average deed searches a month. This has been a record run for orders. Some are portfolio refinancing and some are acquisitions. With a lot of activity in Virginia.
There may be a drop-off in the first quarter of 2023. (With the rates coming, there may be some serious demand for refinancing.)