From the Desk of CF Capital: January Investor Report

Hello Friends and Investors,
It is with great enthusiasm that we say Happy New Year to you! Reflecting on the last 12 months, we're grateful to have gone through so much change at CF Capital and in our personal lives. Beyond that, we've all experienced so much rapid volatility from the macro-environment; a year we will remember for sure. While there's a great deal of market uncertainty looming in 2023, out of all uncertainty there's opportunity, and out of all chaos there's order. It's important to check in with our relationship with volatility, because it can either crush us or be a catalyst for our most impactful opportunities of our lifetime.

"The quality of your life is directly related to how much uncertainty you can comfortably handle." - Tony Robbins

Let this be your reminder to embrace the turbulence this year. Choppy seas create skilled sailors, and distress improves us all as investors. Challenge helps us improve our team, our due diligence, our underwriting, our deal sourcing, our asset management, our construction management, our communications, our leadership and so much more. Without challenge, we atrophy. There's no doubt that there are and will be challenges in 2023, even some not yet on our radar. Our culture and mindset is one that is rock-solidly committed to overcoming difficulties and is committed to delivering results for our partners.

Reflecting back on wrapping up 2023, December was filled with momentum for CF Capital. Some of the highlights included:

  • Our Leadership Team Held Our Annual Offsite (We Run CF Capital on EOS)
  • Our Team and Spouses Enjoyed a Holiday Celebration Dinner
  • Our Team Conducted a Day of Service at Our Local Ronald McDonald House
  • We Made Significant Strides in Property and Company Goals and Budgets
  • We Successfully Transitioned Two Properties' to a New Property Management 3rd Party
  • Team Members Celebrated the Holidays with Family in Arizona, Florida, Alabama, Tennessee, and Kentucky

So it's a new year. Does that mean it's a new market? Time will tell. In 2022, the historic speed at which the Federal Reserve raised rates led to tremendous market disarray, and a disconnect between buyers and sellers in our multifamily space for many months. Generally, commercial real estate markets are slow moving, and this type of rapid change to a critical factor in real estate investing, interest rates, were not fully integrated throughout the markets for quite some time. We anticipate that the calendar change to 2023 will more solidly imprint in sellers' minds that the previous market cycle is now truly history, and we're now operating in a completely new landscape. Further, it is anticipated that market distress is on the horizon, with a meaningful percentage of loans expiring this year on deals that may not be candidates for the needed proceeds on a refinance or may not hit investment metrics on a sale. We continue to scour the market for quality assets - we're mainly focused on B-Class assets at this stage of the market cycle - with a compelling story. While we were very active in December pursuing new investments, no new deals were officially secured (while two came very close) that were appropriate to acquire and offer to you for investment consideration at this time. We are optimistic that Q1 2023 will be more ripe with the right opportunities for your consideration.

We also remain hyper-focused on optimizing our current portfolio during this time. We're mid value-add on several assets right now, and a significant amount of our team's focus is on ensuring we're performing to projections. With a myriad of market headwinds, we're doubling our efforts and focused on results. After all, we're in the business of protecting and growing partner capital, because our relationship with our investors is for the long-haul.

To start off the new year, we've got some exciting things happening on the horizon. For one, Bryan and Tyler will be attending the annual NMHC in Las Vegas at the end of January/first of February. If you'll be attending and we have not yet scheduled a time to meet, please reach out to Rachael via email at [email protected].

Don't hesitate to reach out to discuss your goals for your real estate investments for 2023 and beyond. We always appreciate the opportunity to connect with you directly to learn how we can support you further.

Here's to wishing you a wonderful start to 2023!

In Partnership,

Tyler & Bryan