News
Liquidity, Equity, Debt! Oh Schmooze!
July 29, 2010
| CMBS is back and money is ready to lend, but the borrowers aren't ready to take it, according to a star-studded panel we assembled this morning. More than 550 of ya'll crammed (standing-room only) into the Westin City Center. The Weitzman Co.'s head honcho Herb Weitzman summed it up: “Properties are broken. We have to be fixers getting in the trenches and getting our hands dirty.†| |
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| Herb, CBRE vice chairman Jack Fraker, L&B Realty Advisors EVP David Gleeson, Cushman & Wakefield Texas Capital Markets Group ED Stephannie Mower, and Hillwood Investments CEO Todd Platt. David says he anticipates FDIC pressuring banks next year to put properties on the market but notes that many of the B and C properties in third-tier markets will face difficulties getting financing. L&B's strategy: recapitalization. “We don't want to get in line with 40 to 50 others trying to bid on Class A properties. We've been trying to find off-market deals,†he says. | |
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| Stephannie advises owners to stay put if they have the staying power. “On the buy side, there are a lot of funds raised for distressed assets. We expected the RTC flood, but we haven't seen that." The federal government stepped in differently. CMBS is different than SNL, and after the November elections, we'll see an increase in smaller bank closures," she says. The government is not in a position to hold onto the assets, and Stephannie notes that private investors haven't had the day of reckoning they expected—many maintain hope that the government will bail them out, too. Her advice: buyers should stick to assets they know and markets they can see. | |
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| Cantor Fitzgerald managing director Jon Trauben, with Churchill Capital Company CEO/principal Jim Neil, says the NYC-based firm has plans for the Texas market. “I can't make an announcement today, but we are close to creating a venture with a correspondent lender in Texas to have a local presence,†he says. “We're going to be a national lender and we can't do that from LA, New York, or Chicago. We have to be in the local market.†He says news may be coming in the next week or two. | |
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| Walker & Dunlop SVP and central region manager Vic Clark answers moderator Winstead chairman Kevin Sullivan, saying he's never seen Freddie Mac and Fannie Mae compete more to win a deal they like than today. With seven-year deals at 4.6% and 10-year fixed-rate non-recourse deals at sub-5%, “if that won't get a market going, I'm not sure what will.†All forms of multifamily—from student housing to mobile home parks—can get agency lending. While multifamily has many arms for loans, he says the non-multifamily market clearly needs something like CMBS. “The government hasn't stepped in to help sectors like hospitality and retail. Those sectors needed CMBS yesterday.†| |
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| Before the event, we caught up with three of our speakers: Goldman Sachs Commercial Mortgage Capital co-CEO Roddy O'Neal, BBVA Compass Bank Texas real estate market manager John Reichenbach, and Newport Capital Advisors CEO Jeffrey Juster. John tells us with the acquisition of Guaranty Bank, BBVA/Compass grew from $50B to $70B in assets and is looking at buying more banks through an aggressive growth plan. During the panel, Roddy says Goldman Sachs began marketing an $800M pool last month, and has sold a B piece. About 80% of the pool of 27 loans is retail, he says. “Our sweet spot is what the investors will buy and the perception is that since retail properties were the first to get hit, they'll be the first to come back.†| |
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| Coffee firmly in hand, Principal Property Resources president Darrell Lake, here with Cencor Realty Services EVP David Palmer, tells us he's currently focused on the 26-acre Roanoke Vista shopping center project at 377 and 114 in Roanoke. Darrell tells us the region's housing has grown unabated in the past two years and new schools, including the $90M Byron Nelson High School just one mile east and a new elementary under construction nearby are fueling the interest he's seeing from users. “Maybe most important for Roanoke Vista is the sustained and growing strength of the existing retailers and restaurants adjacent to it, as well as in the recently renovated downtown Roanoke District.†He was hush-hush about it, but said he hopes to announce commitments soon. | |
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| Simultaneously, we held an event in DC for 1,100, and laid plans for a mutual Video Skype to prove our national reach and technological dexterity. | |
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| Unfortunately, although we could see each other, the video Skype didn't seem to have audio, and your befuddled publisher and moderator (in DC) could only wave. Just as well: His plan to say,“Houston, we have a problem†would probably not have sat well with us in Dallas. |
