LONG BEACH, CA-A leveling or regression in the stock market won't have a significant impact on property values or transaction volume in Southern California, according to W. Henry Walker of Farmers & Merchants Bank.
Walker, the president of the 21-branch F&M Bank, cautioned that the current red-hot market is “a story of low financing rates,” which he said are pushing up property values, a situation “we never want to see.” The result is that the rising values “make some product that should be viable, viable.”
Land development remains “a high-risk play,” Walker says, adding that the office market also will remain risky until “we get a little more traction in the employment market.”
Farmers & Merchants is conservative in its lending, Walker says, holding firm at around a 55% loan to value ratio. F&M Bank focuses on Los Angeles and Orange County and Walker says coastal property values in those areas are expected to remain strong.
Farmers & Merchants Bank most recently provided $8.4 million in financing to Los Angeles-based Sampont Properties for the acquisition of CVS Plaza, a 31,140-square-foot multi-tenant retail center in Huntington Beach.
RealShare's Investment & Finance Conference, being held later this month in San Diego, will cover capital markets and other issues that will impact investments.
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