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Let’s face it, the story of 2022 will be the Federal Reserve’s policy to combat inflation.
Inflation soared in 2022 as a result of a strong labor market, stressed supply chains, an abundance of low-cost capital and pandemic-related stimulus programs, all of which mixed to fuel furious growth. Rising rates, which we have not seen since before the Great Recession, along with an inverted yield curve, can signal headwinds – none more amplified than a possible recession in the coming year. After seven Federal Reserve interest rate hikes in a relatively short timetable, we find ourselves assessing and measuring not simply whether there will be more rate increases, but more importantly, what this means for the economic conditions and for commercial lenders and borrowers in 2023 and beyond. Higher borrowing costs historically hit the housing market first, as potential buyers have less borrowing capacity, which can put downward pressure on housing prices and values. However, this can still be offset by a strong labor market, along with low supply of housing, specifically in affordable housing. With potential demand high, sellers may be reluctant to reduce prices, while landlords can maintain or even increase rents. As developers see higher borrowing costs and municipal permitting processes limit new development or impose stricter conditions – such as affordability or green initiatives – volume and scale of new projects may slow. This will keep rental and housing unit inventories from rising too rapidly. While rising rates are impacting existing projects, many of which were started prior to or at the onset of the rate increases, the true impact will be on future development and financing of projects currently in the planning stage. How Will Asset Classes Respond? One of the biggest areas to watch will be the impact of rising rates on stronger asset classes, like multifamily housing. Multifamily housing has been a leader among all commercial asset classes and still has robust activity, due to the availability and diverse sources of equity capital that can partner with higher-cost debt. According to most sources, rents remain stable or are expected to increase in 2023, with vacancy rates continuing at low levels. Rents are reliant on a strong labor market, and although inflation and rates are on the rise, one of the primary causes is the low unemployment, which is a leading indicator for rents. Landlords may also see an increase in the pool of renters waiting out home prices, which some expect to decline in 2023. The capital markets will be watching employment numbers closely in 2023. Overall, the multifamily sector continues to show strength and drive activity. Less can be said about other asset classes such as office or retail, already reeling from the pandemic. Office markets may see more stress in a slowing economy brought on by rising rates, and banks will be watching the sublease and rollover activity very closely. Negative trends in the office markets could further drive repurposing of office into lab or residential products. Surprisingly, retail has shown resilience, especially in grocery-anchored retail plazas, and as a result of lower inventory. With inflationary pressure on consumers, lenders will be watching credit quality of the retail tenants into 2023. Commercial and industrial borrowers entered this inflationary period buoyed by stimulus programs, such as the Paycheck Protection Program, providing liquidity and seeing robust economic growth post-pandemic. Many took advantage of stimulus funds to avoid layoffs, reduce debt and firm up balance sheets. Choppy Waters Ahead Looking ahead, banks will be paying close attention to income statements and looking for margin compression. Increased interest expense, specifically for working capital, is a leading cause, as the prime rate has more than doubled since the beginning of 2022. While companies report some relief in their supply chains of late, materials, upward pressures on labor expenses and healthcare costs will require more adaptation of cost controls and innovation with technology to keep bottom-line profits from decreasing. Although borrowing at higher interest rates, companies looking to expand still find a healthy lending environment and continue to have accessible capital from lenders. While rising rates themselves aren’t very popular, savings rates are being cheered by depositors, who are seeing returns on savings accounts held at banks, the likes not seen in over a decade. Many forecasts predict that the Fed could deliver a soft landing, even cut rates late 2023 or early 2024. Until then, lenders and borrowers will have to work closely to navigate the choppy waters ahead. In spite of these headwinds, there are reports of healthy backlogs and decreases in material costs, such as lumber, offsetting the higher borrowing costs in the short term. The year 2022 ended with many companies reporting strong profits, development soaring and an economy weathering record inflation and turbulent global conditions, which was a subplot to the Fed’s fight with inflation. Now 2023 starts out having us look back at 2022 and wonder, was that the “worst” best year we all had? Stephen DiPrete is chief commercial banking officer at Weymouth-based South Shore Bank.
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Guest Blog: MA Legislature extends and expands COVID-19 temporary emergency paid sick leave program10/13/2021 On September 29, 2021, the day before it was set to expire, the Massachusetts legislature amended the COVID-19 Emergency Paid Sick Leave Act (MA EPSL), extending it until April 1, 2022 or the exhaustion of $75 million in program funds, whichever is earlier. Additionally, the amended MA EPSL expanded the reasons for which employees can use sick leave to include “to care for a family member who needs to obtain or recover from a COVID-19 immunization.”
REASONS FOR LEAVE Under the amended MA EPSL, Massachusetts private and public employers are required to provide emergency paid sick leave to employees who are unable to work for the following COVID-19-related reasons:
 By Caroline Quinn, Founder & Chief Marketing Strategist, Quinnovative Marketing Whether you’re starting a new business or you have an existing one, you need marketing to keep it top of mind with your customers and prospects. But with everything you have to deal with as a business owner, just the thought of creating a marketing plan can feel overwhelming. Many business owners I’ve met tend to fly by the seat of their pants when it comes to marketing, trying random things and wondering why nothing seems to work. So where do you begin? What should you focus on? How will you know that your marketing is actually working? This guide will walk you through the process of creating a strategic marketing plan that’s designed to achieve your goals and help your business grow. Will it take time to put this together? Yes. It’s important to take the time to really think this through on the front-end. When you do, the reward will be a focused plan that takes the guesswork out of what you should be doing with your marketing. And going forward, you’ll just need to update your plan rather than doing the whole thing over again. One thing to keep in mind: a good marketing plan is designed to be flexible. Things can change and new opportunities can come up that you weren’t expecting. It’s ok to make adjustments as you go along, as long as they support your goals This marketing plan guide has 5 sections:
Let’s go over each one. Provided by Brendan Collins and Nan O’Neill of Murphy, Hesse, Toomey, & Lehane, LLP The Biden administration’s pledge that the federal government will take a more hands-on approach to curbing new COVID-19 infections is now taking shape in various executive agencies. One such agency is the Occupational Safety and Health Administration (OSHA), which is the agency tasked with ensuring safe working conditions for American workers. The Biden administration has called on OSHA to further help identify risks of workplace exposure to COVID-19 and to determine the appropriate control measures to implement.
I. President Biden Issues Executive Order on January 21, 2021 to Protect the Health and Safety of Workers from COVID-19 In an Executive Order dated January 21, 2021, President Biden called on OSHA to perform a variety of COVID-19-prevention assignments. These assignments are helpful clues of what may be to come with regards to workplace safety requirements in relation to COVID-19. President Biden’s assignments include the following: Labor and Employment Alert: Unpacking the Federal Stimulus Package’s Direct Payments, Enhanced Unemployment Payments, and FFCRA Leave ExtensionFor a discussion of these and other legal issues, please visit our website at www.mhtl.com. To receive legal updates via e-mail, contact [email protected].
Introduction: There has been a great deal of discussion in the news lately about the latest Congressional stimulus package, which was ultimately signed by President Trump on Sunday, December 27, 2020, following his initial pushback. The stimulus package, officially known as the Consolidated Appropriations Act of 2021 (the “Stimulus”), is a behemoth piece of legislation that consists of nearly 5,600 pages, covering a broad array of appropriation matters. The Stimulus addresses elements of the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which were both signed into law in March 2020. The FFCRA provides paid sick leave and family leave entitlements while the CARES Act provides economic relief for both out-of-work employees and businesses that are shut down or have curtailed business operations as a result of COVID-19. Both laws contained sunset provisions with an end date of December 31, 2020. With COVID-19 still ever-present, the Stimulus addresses the continuation of certain elements of the FFCRA and the CARES Act, and also includes a variety of new spending provisions that are unrelated to COVID-19. The purpose of this Client Alert is to identify the key employment-related elements of the Stimulus in order to better understand what impact it will have on your businesses and organizations. Highlights $600 Direct Payments: By Christina Refford, Marketing Specialist, South Shore Staffing
November 15th starts International Fraud Awareness Week, a time when we should all educate ourselves about fraud and how to protect ourselves against it. At South Shore Staffing, we have had two close calls with unemployment fraud in a short period of time. To learn more about unemployment fraud specifically, keep reading for tips on how to handle it: With unemployment rates so high due to pandemic-related layoffs and closures, one group is taking full advantage of the situation: The scammers. From super-sophisticated organizations draining states of millions of dollars, to opportunists who want to make a quick buck, the rise in fraudulent unemployment activity is alarming. In fact, the FBI even notified states of the rise in unemployment claims using stolen personal information back in July. Federal relief programs such as the $2.2 trillion federal CARES Act which provides Pandemic Unemployment Assistance (PUA) has only increased the illegal activity. In fact, Colorado had to stop $750 million to $1 billion in improper payments because more than three out of four claims made under the PUA program were fraudulent! By Nan O'Neill, Partner, Murphy, Hesse, Toomey & Lehane, LLP For a discussion of these and other legal issues, please visit our website at www.mhtl.com. To receive legal updates via e-mail, contact [email protected].
On Monday, November 2, 2020, Governor Baker issued three new COVID-19 Orders, all of which are effective Friday, November 6, 2020 at 12:01 a.m. COVID-19 Order No. 53 (https://www.mass.gov/doc/covid-19-order-53/download) imposes a Mandatory Night-Time Closing Period for Certain Businesses and Activities from 9:30 p.m. each day until 5:00 a.m. the following day. This Mandatory Closing Period Order prohibits certain businesses, facilities, and activities from admitting customers, patrons, or members of the public to their premises or otherwise offering, providing, or permitting in-person, on-premises services or activities, during the closed period. Businesses, facilities, and activities subject to the mandatory closing period include:
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