Beyond The Summit

Family & Football

Last month, my mom came out to visit us here in Washington for the first time in 10 years. I usually make it back to Michigan every year, but with how busy things have been, we decided it was long overdue for her to head out west.

One of the highlights was taking her to her very first NFL game. Football was always on in our house growing up, so it was really special to share that experience with her. We also brought our good friend Dan along to celebrate his birthday, which made the day even better.

It’s moments like these that remind me how important it is to slow down and soak up time with the people you love whenever you have the opportunity to.

View From The Summit

Preparing for Your Next Investment Opportunity

As 2024 draws to a close, we’re excited by the momentum we’ve built heading into the new year. While the commercial real estate market began the year slowly, the pace has steadily picked up, and we’re seeing more opportunities that align with our strategy.

This year has taught us the value of patience and preparation, and with nearly 200 properties carefully underwritten, we’ve gained sharp insights into what defines a truly compelling investment.

Looking ahead, we’re optimistic about the opportunities 2025 will bring. With a focus on precision and preparation, we are committed to working with investors who share our vision. Building strong relationships now ensures we’re aligned and ready to act together when the right opportunities arise.

Market Pulse

Essential Financial Indicators at a Glance

As of market close Dec 5, 2024 (MoM change)

US Ten Year Treasury Yield: 4.178% (-0.104%)

SOFR (Secured Overnight Financing Rate): 4.59% (-0.22%)

10 Year Treasury Minus 2 Year Treasury Spread: 0.05 (-0.06%)

30-Year Fannie Mae & Freddie Mac Rates: 6.69% (-0.03%)

S&P 500: $6,075.11 (+$369.66)

NYSE Steel Index: $2057.18 (+$68.45)

Spot Price Gold: $2648.70/oz (-$111.10)

Crude Oil Price: $68.43 (-$2.38)

Bitcoin: $99,034.12 (+$28,838.75)

Ethereum: $3860.39 (+$1,339.41)

Rates listed are estimates and may not reflect actual rates depending on term, sponsor location, and other factors.

National Market News

What We Are Watching as 2025 Begins

As new leadership prepares to take office in January alongside a newly elected Congress, several economic policies are expected to shift, influencing not only real estate markets but also the daily lives of Americans. From potential tax reforms to trade policy updates and inflation trends, these changes may shape the financial landscape for years to come.

Tax Policy Changes: The Expiration of the 2017 Jobs Act

The expiration of key provisions in the 2017 Tax Cuts and Jobs Act (TCJA) could bring significant changes for Americans. Without action from Congress, tax brackets will rise, and the standard deduction will drop by $6,300 for single filers and $12,600 for joint filers. This shift would result in higher taxable income and reduced take-home pay, impacting household budgets and financial planning.

Given that the TCJA was a hallmark of President Trump’s prior administration, we anticipate the new administration will seek to extend or renew its core provisions. Allowing the TCJA to expire would create widespread financial strain for many Americans, particularly in an already challenging economic environment.

While details remain uncertain, a continuation of the policy—or a similar framework—would provide much-needed stability and predictability for taxpayers and investors alike.

Trade Policy and Global Supply Chains

Proposed tariffs are poised to be a major focus for the incoming administration, last identified as 25% on imports from Canada and Mexico, and 35% on imports from China. While these changes are not yet finalized, they have the potential to significantly increase the cost of goods across the board.

Tariffs on essential materials like steel and lumber are likely to raise construction and renovation costs, further stalling new developments and making current projects more expensive to complete. This will likely increase the demand for other real estate asset classes such as value-add multifamily.

Beyond real estate, the impact of these tariffs will ripple through everyday life. In 2023, nearly 75% of fresh fruits and vegetables were imported from Mexico, much of the lumber came from Canada, and smartphones were predominantly sourced from China. Tariffs on these goods will only drive up prices further for groceries, homebuilding supplies, and consumer electronics, keeping inflationary pressures high and cutting into household budgets.

Prolonged shifts in global supply chains, driven by proposed tariffs, are expected to create localized shortages. Since the U.S. is not positioned to replace these supply chains overnight, families and individuals will face rising costs for both large purchases and daily essentials. This underscores the importance of closely monitoring policy developments and adapting budgets to navigate potential price increases effectively.

Interest Rates and Inflation

Inflation remains a defining factor as we approach the new year. While inflation has cooled overall, persistent pressures in key areas like housing and transportation continue to strain household budgets. High mortgage rates are driving shelter inflation, while auto insurance premiums and other transportation costs remain elevated. Everyday essentials such as groceries and services also show little sign of meaningful relief.

If proposed tariffs are enacted, inflation could escalate rapidly. For instance, lumber tariffs would drive up construction costs, worsening housing affordability, while tariffs on imported produce could lead to immediate increases in grocery prices. These factors underscore the importance of strategic financial planning in navigating economic uncertainty.

For investors, real estate remains a dependable hedge against inflation. Unlike cash or stocks, tangible assets like property often maintain or even increase in value during inflationary periods, offering a safeguard for capital. While borrowing costs are elevated, real estate’s long-term stability continues to provide opportunities for both protection and growth in an uncertain economic landscape.

Local Market News

From MSA's we are Actively Evaluating Investment Opportunities

Tyler, Texas: Where Growth Meets Opportunity

Nestled in the heart of East Texas, just 90 miles east of Dallas, Tyler is a city on the rise. With a population just over 225,000, Tyler blends small-town charm with big-city potential. In 2021, the Tyler MSA made headlines by outpacing the nation, Texas, and every other Texas metro in job growth—a clear indicator of its dynamic and expanding economy. Known as the “Rose Capital of America,” Tyler’s appeal goes far beyond its famed blooms, offering a strategic location and a thriving hub for healthcare, education, and business.

Tyler’s growth story is bolstered by a diverse economic base anchored by thriving healthcare systems and institutions of advanced education. Its location at the crossroads of major highways has spurred investment in logistics, industrial hubs, and retail centers.

Meanwhile, revitalization efforts downtown are breathing new life into the city’s core with mixed-use developments and vibrant community spaces. Add to this a steady stream of new residents drawn by its affordability and quality of life, and it’s clear that Tyler is a city bursting with energy and opportunity, making its momentum worth watching.

The Path Forward

Opportunities Exist for Those Who Are Prepared

As we move into 2025, we’re optimistic about the opportunities unfolding in the value-add multifamily space. While the broader economic landscape presents challenges such as inflation, trade policy adjustments, and high interest rates, the trends we’re seeing align strongly with our strategic approach.

With careful planning and a proactive mindset, we’re confident that the year ahead will bring significant opportunities for those prepared to act decisively. At Bright Peak Capital we’re committed to staying ahead of the curve, providing the insights and expertise needed to navigate these shifts and make informed, strategic decisions.

Together, we’re poised to make 2025 a year of strategic growth and impactful opportunities for all our investors.

Thank you for your continued trust and partnership.

Reach Your Summit