November Newsletter

By Jesse Etherington

Pro Commercial
November 29, 2024

Crypto and Construction; Could your next project be tokenized?

Crypto and Construction: Could Your Next Project Be Tokenized?

With a pro-crypto administration in charge, blockchain technology isn’t just a buzzword anymore: it’s changing the game across industries, and commercial development is no exception. Platforms like tZERO, RedSwan CRE, and Brickblock are shaking up how projects are funded through a process called tokenization.

 

So, what’s tokenization all about? Picture breaking a large real estate project into smaller, digital shares that investors can buy, kind of like owning a slice of the pie without buying the whole thing. For developers, this opens up a whole new world: raising capital from a global network of crypto-savvy investors who share your vision. Imagine funding your next hotel or mixed-use development, not just through banks or traditional partners, but from thousands of people worldwide, all connected through blockchain.

 

And the benefits? Transactions are faster, more transparent, and way more cost-effective. By cutting out unnecessary middlemen, blockchain saves time and money while making funding more efficient. For investors, it’s a chance to own a piece of high-potential projects without needing a massive upfront investment.

 

Will tokenization become the go-to way to fund real estate projects? Time will tell, but one thing’s for sure: it’s an exciting time to be part of this movement. The future of funding is evolving, and it’s only just getting started.

Behind the Build: Renovating an Occupied Senior Living Facility in Des Moines, IA

Senior Living Facility in Des Moines, IA

This year, we took on a unique challenge: renovating a fully occupied senior living facility for Presbyterian Homes. With some of the residents living with memory care needs, such as dementia, this project required a high level of care and consideration to ensure their care and comfort.

 

Our project manager, Brennan Goodman, led the effort with exceptional leadership, working closely with the facility’s management team to balance construction needs with the daily operations of the facility.

 

So, what made this large-scale, occupied renovation project a success? Here are the three key factors that drove us forward:

 

1. Clear and Consistent Communication
Brennan worked to establish open lines of communication with residents, staff, and trade partners from day one. Regular updates ensured everyone was informed about the project’s schedule, scope, and any potential challenges. This collaborative approach minimized disruptions and fostered a cooperative atmosphere, helping us stay efficient and aligned.

 

2. Adaptability
In a project like this, flexibility is everything. Whether we faced design changes, supply delays, or unique resident needs, our team had to adapt quickly to keep things on track.

 

3. Intentional Urgency
With the residents’ well-being in mind, we tackled every task with purpose and urgency. Meeting deadlines and addressing issues as they arose ensured that the renovation progressed smoothly, minimizing disruptions and maintaining momentum.

We don’t always get to see firsthand how the spaces we build impact the people who use them. This project was a rare and rewarding opportunity to witness the difference our work made in residents’ daily lives. We’re proud to be part of an industry that creates meaningful change and grateful for the chance to serve this community!

Interest Rates: What Developers Need to Know About the Road Ahead

Interest rates on a screen

Interest rates are always a hot topic, but they’re taking center stage as the Federal Reserve weighs its next moves. With President-elect Donald Trump preparing to take office, speculation is running high on where rates are headed and what that means for commercial developers.

 

The Latest from the Fed
Earlier this month, the Federal Reserve trimmed the federal funds rate by 0.25%, bringing it to a range of 4.5–4.75%. It’s a small step, but it’s clear the Fed is treading cautiously. Inflation has cooled somewhat, but the latest data shows it’s still above the Fed’s 2% target, keeping officials on their toes. Meanwhile, the labor market remains resilient, adding complexity to the Fed’s decisions.

 

What does all this mean for December? The markets are split. Some predict another rate cut, while others think the Fed might hit pause to evaluate how the economy responds to recent changes. Either way, developers should keep a close watch—the next move could set the tone for 2025.

 

Why Developers Should Care

Let’s break it down:

 

  • If Rates Go Up: Borrowing gets more expensive. Higher financing costs could slow down new projects and impact property values by pushing up capitalization rates.

  • If Rates Go Down: Lower borrowing costs make it easier to get projects off the ground. Plus, lower rates could boost property values by reducing cap rates.

What to Watch

The Federal Reserve’s December meeting will be critical. Developers should also keep an eye on broader economic trends—like inflation, employment data, and market sentiment—which will all play a role in shaping the Fed’s decisions.

 

At the same time, Trump’s incoming administration could influence the landscape with tax reforms and pro-business policies, potentially offsetting some of the challenges posed by higher rates.

The Bottom Line

As we close out 2024, the stakes are high, and the opportunities are real. Keep an eye on the Fed, the data, and the administration’s policy moves. This story is just getting started!

Looking to build? Let’s talk!

Jesse Etherington

(641) 257-9286