The idea of being transparent with company performance makes some private business owners squirm. Holding your business metrics close to the vest is one of the classic advantages of staying private, rather than subjecting yourself to reporting requirements and analyst questions quarterly like a public company. Don’t get me wrong, I love that I don’t have to report to thousands of investors and dozens of analysts, but I also love transparency for multiple reasons, including the fact that I find being more transparent attracts people who are a better fit for our company than otherwise.

In that vein, I’m happy to announce that StackSource has officially surpassed 10 basis points of market share in the commercial mortgage market!

For reference, approximately $740 Billion of commercial mortgages were arranged in the United States last year. So we’re saying that StackSource exceeded $740 Million of capital arranged over the calendar year.

Did you think that we were bigger than that already? If so, we’re flattered. I’ll pass along to our Marketing team that they are doing a good job. But no, StackSource is still an up-and-comer in this industry. While still a relatively small player, we have once again successfully arranged a higher dollar volume in the most recent year than in all other years of operation combined, a feat we certainly cannot sustain forever, but have achieved every year since launching in 2017.

Broadening scope in a shifting market

Speaking of Marketing, we recently launched a brand new website which is a much clearer reflection of the way our service has expanded in the last year.

Our old website reflected the way we started: a simple, online process to follow to be connected with the right commercial real estate lenders. While we’re still that, we’ve really upleveled our game in a few key areas that were not reflected until now:

• Capital Stack solutions (Debt & Equity) - Our platform makes it easy not only to find the right loan, but also to source mezzanine debt, equity partners, C-PACE, and other more sophisticated capital stack solutions. The truth is we are now a more respected Debt & Equity shop with some flagship capital placements to prove it.
• Experienced Capital Advisors - When I say “our platform”, it’s not all software features and automation. My real estate finance colleagues are amazing. From vetting deals, to advising on financing structures, to negotiating with capital providers, they make this company run, and clients love them too!

Market outlook

The commercial market is expected to contract further this year. The Mortgage Bankers Alliance (“MBA”) is currently projecting $700 Billion of commercial mortgage origination in 2023, roughly a 5% decrease over 2022. If achieved, that’s still a very healthy year by historical standards, roughly equal to 2019 (a record year at the time) when adjusted for inflation. 

However, the MBA updates its commercial mortgage volume projections quarterly, and sentiment may drop. Most major commercial real estate services firms are cutting costs and planning for a down market in terms of both transaction volume and asset values. While StackSource does not have an official economic projection of our own, I personally believe it prudent to be planning for a recession this year as well as a decline in commercial property values. If the recession and asset price correction do not happen, then better to be pleasantly surprised by the upside than unprepared for the downside.

In any case, an increasing amount of deals executed will require a more structured capital stack, rather than one large, low-rate loan anchoring the transaction. Our research team will be providing monthly updates on the real estate capital markets all year so investors, brokers, and capital providers can stay up to date on the latest news, data, and trends in order to make informed decisions.

Steady vision

While the market evolves and seems to be completing a long and prosperous cycle that lasted for a decade, StackSource’s mission remains the same:

To provide transparent, efficient access to the capital markets for commercial real estate investors to source their ideal capital stack.

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