2nd Quarter Newsletter
Greetings from Atlanta. If you are like me, you are wondering how in the world half of 2025 is behind us already. It has been a very wet, then very hot summer thus far in the Southeast, but cooler temperatures and Fall football will be here before we know it.
The last time I wrote our newsletter was Q3 2023. At the time, I recall struggling to have a positive message. The Fed Funds range was 5.25%-5.50% ,the 10 year Treasury was 4.80% and 30 Day SOFR was 5.32% as the Fed sought to tame inflation. Transaction volume was down and there seemed to be a lot of uncertainty in the market. Since that time, we had 3 rate cuts in 2024 and none thus far in 2025. Fast forward to today, and Fed Funds rate is 4.25%-4.50%, the 10 year Treasury is 4.37%, and 30 Day SOFR is 4.35%. While inflation appears to be under control, the potential inflationary effects of tariffs have kept the Fed in a holding pattern despite pressure from the current administration. The market is pricing in one to possibly two rate cuts this year although no one can be sure as to the affects of potential tariffs and record deficit spending by the government.
Owners, developers and lenders all seem to feel more comfortable with the new normal rate range which by historical standards is very reasonable. As a result, transactions have increased dramatically and Medalist Capital had a very strong second quarter and first half of 2025. Second quarter volume was $427.3 million / 36 loans bringing 2025 total volume to $746.7 million / 63 loans. Loans closed were for all major product types including multi-family, industrial, office, retail, hospitality and self-storage. Capital sources varied among life insurance, banks, agencies, credit unions and specialty finance companies. Absent any major political or economic surprises, we are very optimistic about the second half of the year as all of our lending sources have plenty of capacity for new loans with very competitive pricing.
As always, we wish to extend our sincere gratitude to all of our clients and lending partners (many which go back 30+ years!) for trusting us with their business.