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Check out this new hoodie! I am very grateful for all my clients, but Ernie, Mike and Mary at DC Farms will always hold a special place in my heart.

They were one of my very first greenhouse clients. When they came to see me, they were in a bit of a jam, and we were able to do some restructuring to help them out.

I was just doing my job… but 12 years later and still, every chance they get, they express their sincere gratitude for the help.

Such great people! And a great business too! I’m very excited to watch this business grow and be part of the team to help make it happen.

For those that only know me through UCC, you may not know this, but I’m not a typical mortgage agent.  Truthfully, until recently, I never wrote a single residential mortgage…

I started my career as a CPA and worked in Commercial Banking for the last 15 years or so.

For those paying attention, you may have noticed that in addition to residential mortgages, UCC is doing a lot of commercial and agricultural lending these days.

Earlier this week I spent a full day in Leamington-Kingsville, visiting some of greenhouse clients.

Most people don’t realize this, but a modern greenhouse today, is basically a high-tech manufacturing facility made of glass. The cost of construction is in excess of $1 million per acre… and very rarely do you see anybody build less than 10 acres.

Why do I bring this up? Because as you can imagine, just like residential or commercial real estate, greenhouses are very much interest rate sensitive.

When rates were low… greenhouse values skyrocketed, and new construction was on fire. The industry was in all-out growth mode… as rates increased, expansions and re-sale came to a grinding halt.

Sound familiar?  Basically, it’s the same story as what’s been going on in the residential market.

It’s not only the residential and investment real estate markets that have been impacted by the current interest rate environment.

Other important industries… ones that employ lots of people, produce products that are considered a necessity, export to other countries. These industries have been impacted as well.

The greenhouse farmers want to build more greenhouses. They want to grow more produce. There is a market for it.

But at current interest rates, it just doesn’t make economic sense for them to do so. Truthfully, for those that are highly leveraged, it almost doesn’t make sense even to continue to operate what they already have.

When increasing interest rates, the intent was to slow economic activity. In my “boots on the ground” opinion, mission accomplished. Economic activity has slowed.

And I’m sure the experts see this as well.

But their fear is that if they start to bring rates down too soon and too fast, then all that work to slow down the economy (and more specifically, inflation) will be erased.

So now begins the balancing act. We’ve more than likely seen the end to interest rate hikes (at least, for now), but when do they start to cut? And how quickly do they cut?

I can tell you this… just like the real estate industry, greenhouse farmers are ready to get going… as soon as rates come down, greenhouses will be going up… literally, lots of farmers have building permits in hand and will start building as soon as it makes sense to do so.

My gut feeling is that this current world of volatile interest rates, is not going away.

Although the next direction of rates is likely downwards, that does not mean they won’t go back up shortly thereafter.

This is just a game that we are going to have to get used to and navigate accordingly.

If you need help navigating this crazy interest rate environment… give us a call… we are here to help!

All the best,