Commercial Real Estate 2018 – Trends, Insights and Building a Foundation for Success

1. COMMERCIAL REAL ESTATE – 2018
TRENDS, INSIGHTS, AND BUILDING A FOUNDATION FOR
SUCCESS
Josh Thompson
Susannah Hallgarth
Isaiah Harf

2. OUTLOOK & TRENDS – COMMERCIAL
REAL ESTATE IN 2018

3. Confidential & Privileged DocumentConfidential & Privileged Document
“Despite continued economic growth, the
outlook for commercial real estate in
2018 is cloudy as the cycle enters its late
stages.”
“In times like these, ‘agility’ is more
important than ever for investors and
occupiers.”
• Spencer Levy, CBRE Research
Outlook & trends - CRE in 2018

4. Confidential & Privileged Document
Office
• Completions fall in 2018 but
outpace net absorption
– 20 basis point increase in vacancy to
13.2%
• Overall rent growth to decelerate to
2% (down ~0.5% y/o/y)
• Tech sector responsible for ~20% of
office leasing activity in last 4-years
• Agility, mobility, and amenity

5. Confidential & Privileged Document
Industrial & logistics
• Record-level asset pricing and widespread low cap rates
• E-commerce and omni-channel supply chain still early in the
economic cycle
– 3x more space than traditional
retail supply chain
– E-commerce: grow ~10%/yr.

6. Confidential & Privileged DocumentConfidential & Privileged Document
Retail
• Distinct widening in performance
gaps between the asset classes
• Where is everybody?
– Repurposing, non-traditional retailers, and
driving foot traffic
• Landlords and tenants strategizing
together?
– Omni-channel marketing, technology,
sharing of big data and strategic initiatives
– Partnerships forming
• Some non-gateway markets lead
the pack

7. Confidential & Privileged Document
Multifamily
• Starts continue
slowdown
• Banks scale back
development lending
• Urban “revival”…but
mind the “migration”
factors

8. STATE OF COMMERCIAL REAL
ESTATE – AN SME’S PERSPECTIVE
Isaiah Harf – Director, Stan Johnson Co.

9. Confidential & Privileged Document
Isaiah Harf – Stan Johnson Co.
• Closed > $800MM in transaction volume
• ~40 listings nationwide ranging from $1-11MM
• Prior specialization including disposition of distressed assets
– Asset optimization & strategy in secondary and tertiary markets
• What are net leased assets?
• The role of capital markets
– Commercial mortgage backed securitization

10. Confidential & Privileged Document
Isaiah Harf – Stan Johnson Co.
• National CRE trends and forward guidance, expectations in
2018 and beyond
• Impact of 2017 Budget Reconciliation Act (tax cuts)
– 1031 “like kind exchanges”
• Community size FI’s and their roles in CRE
– Credit quality, underwriting requirements
– How to better compete?
• Technology and disruption

11. NEXTGEN AND
COMMERCIAL REAL ESTATE

12. Confidential & Privileged DocumentConfidential & Privileged Document
Commercial Real Estate in NextGen
• Create multiple financial statements on a single client record
• Access to Master Chart of Accounts to tailor the statement
industry to your institution
• Tie collateral records to statements
• Run standard or custom reports

13. Confidential & Privileged DocumentConfidential & Privileged Document
Collateral + Commercial Real Estate
Within Baker Hill NextGen’s collateral section…
• Appraisal information, manually entered or imported, for all
Real Estate collateral items
• Property Income information for all Real Estate collateral
items, including multiple iterations such as rent rolls
• Tied financial statements, allowing the refresh of value
information into the statement from collateral appraisals and
property income

14. Thank you! Questions/Discussion?