McCallum’s Musings on the Market – 1/7/2026

McCallum’s Musings on the Market!

• The Federal Reserve implemented 3 rate cuts in September, October, and December 2025. Expect two additional quarter-point reductions in 2026, one more than Fed officials’ median forecast. 
• While the Fed is easing, it won’t solve fundamental issues with current DSCR tests and higher cap rates. NOI continues to be impacted by ever-increasing operating costs & CAPEX. 
• 5yr & 10yr fixed interest rates continue to be favorable – recent quotes range from the high 5%’s to low 6%’s.

McCallum’s Music Pick: Peace Sells by Megadeth

Case Study

• Sacramento, CA
• 48,492 SF
• Industrial property on 6.5 acres
• 5.98% fixed interest rate for initial 5 years
• $3.84MM cash out refinance; unrestricted $1.65MM proceeds at close of escrow

John McCallum, Borrower’s Advocate, completed this cash-out refinance of a multi-tenanted industrial property in late 2025. The property featured a significant concentration of automotive tenants – sales, repair, Diagnostic & body shops; most of which were on staggered lease terms. Known for representing owners and investors in obtaining the best financing solutions, John sourced the ten-year loan term and provided the owners significant unrestricted loan proceeds to continue to grow their industrial real estate portfolio.

Featured Article

U.S. MANUFACTURING SLUMP SHOWS LITTLE SIGN OF ENDING: A closely watched index that measures U.S. manufacturing activity fell to 47.9% in December, the Institute for Supply Management said Monday. This is the lowest reading of the year and the 10th straight month of contraction in the factory sector. Any number below 50% signals contraction.