Strategic Plays for the 2nd Half of Market Recovery: DetroitEDR
Presented by Dianne P. Crocker
Detroit DDD, November 7, 2013
In the grand scheme of market recovery, we now stand at the start of the second act. The past five years were all about survival. 2013 was the true start of market rehabilitation. And now as we prepare for 2014, optimism has finally taken root. Business confidence, profitability and investors’ forecasts are more positive than they have been in recent years. Despite the uncertain economic outlook, the prospects for property assessment firms are more encouraging than at any time since 2008. 2014 will be a year of refocusing and repositioning in a still-challenging market. Get the latest take on the market’s new normal:
-Pricing and turnaround time benchmarks
-The new clients, new lenders, new drivers
-Trends reshaping the market
-A look at what to expect in 2014
How to Create Strategic Value in the Current Environment | AOBA 2017Mercer Capital
In this session originally presented at Bank Director's 2017 AOBA conference, Jay Wilson and Andy Gibbs of Mercer Capital, alongside Chris Nichols of CenterState Bank, examined how banks can utilize a hybrid approach and co-opt, partner with or acquire FinTech companies, wealth management and trust operations and insurance brokerages. By pairing traditional banking services with other financial services and means of delivery, banks can obtain more touch points for customer relationships, enhance revenue and ultimately improve the bank’s valuation.
INSIDE WORD FROM THE LENDING SECTOR:
The Top Environmental Challenges Lenders Face
EDR Webinar
Tuesday, May 31, 2011
Dianne P. Crocker, Principal Analyst
EDR Market Research Group
The Low to moderate income residential homebuyer has been overlooked by many lenders. This is an opportunity that could change the face of many communities and increase profitability of many banks.
• What is a Reverse Mortgage?
• What is the Home Equity Conversion Mortgage
(HECM) for Purchase?
• How can it help you build your business?
• How can it help senior homebuyers?
• Example of a HECM for Purchase transaction
Strategic Plays for the 2nd Half of Market Recovery: DetroitEDR
Presented by Dianne P. Crocker
Detroit DDD, November 7, 2013
In the grand scheme of market recovery, we now stand at the start of the second act. The past five years were all about survival. 2013 was the true start of market rehabilitation. And now as we prepare for 2014, optimism has finally taken root. Business confidence, profitability and investors’ forecasts are more positive than they have been in recent years. Despite the uncertain economic outlook, the prospects for property assessment firms are more encouraging than at any time since 2008. 2014 will be a year of refocusing and repositioning in a still-challenging market. Get the latest take on the market’s new normal:
-Pricing and turnaround time benchmarks
-The new clients, new lenders, new drivers
-Trends reshaping the market
-A look at what to expect in 2014
How to Create Strategic Value in the Current Environment | AOBA 2017Mercer Capital
In this session originally presented at Bank Director's 2017 AOBA conference, Jay Wilson and Andy Gibbs of Mercer Capital, alongside Chris Nichols of CenterState Bank, examined how banks can utilize a hybrid approach and co-opt, partner with or acquire FinTech companies, wealth management and trust operations and insurance brokerages. By pairing traditional banking services with other financial services and means of delivery, banks can obtain more touch points for customer relationships, enhance revenue and ultimately improve the bank’s valuation.
INSIDE WORD FROM THE LENDING SECTOR:
The Top Environmental Challenges Lenders Face
EDR Webinar
Tuesday, May 31, 2011
Dianne P. Crocker, Principal Analyst
EDR Market Research Group
The Low to moderate income residential homebuyer has been overlooked by many lenders. This is an opportunity that could change the face of many communities and increase profitability of many banks.
• What is a Reverse Mortgage?
• What is the Home Equity Conversion Mortgage
(HECM) for Purchase?
• How can it help you build your business?
• How can it help senior homebuyers?
• Example of a HECM for Purchase transaction
Design of A Spell Corrector For Hausa LanguageWaqas Tariq
In this article, a spell corrector has been designed for the Hausa language which is the second most spoken language in Africa and do not yet have processing tools. This study is a contribution to the automatic processing of the Hausa language. We used existing techniques for other languages and adapted them to the special case of the Hausa language. The corrector designed operates essentially on Mijinguini’s dictionary and characteristics of the Hausa alphabet. After a brief review on spell checking and spell correcting techniques and the state of art in the Hausa language processing, we opted for the data structures trie and hash table to represent the dictionary. The edit distance and the specificities of the Hausa alphabet have been used to detect and correct spelling errors. The implementation of the spell corrector has been made on a special editor developed for that purpose (LyTexEditor) but also as an extension (add-on) for OpenOffice.org. A comparison was made on the performance of the two data structures used.
2014 Forecast: Entering the 2nd Half Of Market RecoveryEDR
Current stats on commercial real estate deals, metros to watch in the year year, lending trends and risk tolerance as we head into 2014.
Presented by Dianne Crocker, Principal Analyst, EDR Insight
EBA RMC monthly call, January 2014
5 predictions for commercial real estate, risk management and lending in 2018. Presented by Dianne Crocker, EDR Insight in her opening comments at the Environmental Bankers Association Conference in Long Beach, CA on January 15, 2018.
BoyarMiller Breakfast Forum: The Current State of the Capital Markets 2016BoyarMiller
As part of its ongoing Breakfast Forum series, BoyarMiller gathered industry experts for a panel discussion on the Current State of the Capital Markets. Speakers included Drew Kanaly with Kanaly Trust, Cliff Atherton with GulfStar Group and John Sarvadi with Texas Capital Bank, LLC.
More online: http://www.boyarmiller.com/news-and-publications/events/breakfast-forum-current-state-capital-markets-2016/
Cracking the Vault: Challenges & Obstacles in Acquisition of Banks’ Real Estate Assets by Jon Winick, President, Clark Street Capital. Presented at GreenPearl Events' Distressed Real Estate Summit Chicago on May 13, 2010.
2018 has been a challenging year for commercial banks, with loan demand falling short of goals, spreads compressing and credit standards easing. Join us for this webinar, where Gita Thollesson, SVP of Client Success at PrecisionLender will provide a retrospective on 2018 and discuss opportunities for maximizing performance in the context of market realities as we head into 2019.
Wells Fargo is one of the largest banking and financial service providers in the US. However, the company has recently been accused of staggering fake accounts scam, which has put the company in deep trouble. Find the details about the scandal and the SWOT analysis of the company in this presentation.
The Next Recession is Coming... This is Your Survival GuidePhil Argue
This presentation was presented as a webinar in July 2018 with Early Growth Financial Services and Prepared Capital. The link to the webinar (with audio) is available here: https://preparedcapital.com/blog/the-next-recession-is-coming-survival-guide/
Sources of Capital in Today’s Difficult Credit EnvironmentSSDlaw
Your bank tells you that they won't lend you any more money (or they want the money back that they have loaned to you). What do you do now? Despite a very difficult credit environment, there are other options to fund your business. Please join Michael Booth of Sebaly Shillito + Dyer, and Cliff Bishop of Brady Ware Capital for a discussion of the current state of the credit markets as well as other options for funding the capital needs of your business.
Canadian banking and lending 2013: A mid-year pulse checkDeloitte Canada
Early 2013 data indicates that we’ll see a strong Canadian credit market this year. Business lending is on the rise. Canadian banks are increasingly keen to lend, while Canadian companies are looking for additional funds to boost liquidity and seize investment opportunities. It’s a good sign for Canada’s banks — and Canada’s economy overall.
Similar to EDR Insight Update: Navigating in an Uncertain Market- Cincinnati (20)
EDR Insight Update: Navigating in an Uncertain Market- Cincinnati
1. EDR Insight Market Update:
Navigating In An Uncertain Market
Presented by:
Dianne P. Crocker, Principal Analyst
For presentation at:
Cincinnati Due Diligence at Dawn workshop
March 2013
4. Bumpy Road for Commercial Real Estate
• 4Q12: the most active
quarter since 4Q07.
• Deal flow increased
37% for the year.
• Now well above „09
trough.
5. Multifamily, Office Drive Property Deals
• Majority of gains driven by:
• Multifamily +47%
• Class A office +20%
• The “sweet spots”
• Largely viewed as low risk
• Retail: +19%
• Recovering, but bifurcated
6. Good News on the CMBS Front
• Post-recession high of $48B in 2012
• Robust start to 2013.
• January saw the highest monthly volume since
December 2007.
8. LENDING: Positive Signs
“By almost every observable metric, the
American banking system will enter 2013 with
its strongest balance sheet position since
before the financial crisis.”
9. Commercial Real Estate Loan Volume
• Commercial and
multifamily mortgage
originations hit their
highest levels since
2007 in 4Q12.
• Originations in 2012
increased 24 percent
over 2011.
10. Lending in 2013
• Glacial deleveraging continues.
• More confidence, more borrowers.
• Competition for loans heating up.
• Certain large financial institutions are extremely
bullish about CRE lending.
15. Spotlight: Cincinnati
• Slow recovery underway
• Developers:
• Starting to dust off plans which were created before
2008
• Looking toward underutilized properties as potential
opportunities for redevelopment into apartment uses.
20. Cincinnati‟s Top Developers
• Industrial Development International:
• Ranked 1st with 17 million square feet.
• Miller-Valentine Group:
• Ranked 2nd with 11 million square feet
• Colliers International:
• Added 5 million square feet to its portfolio.
• Neyer Management/Neyer Commercial Real Estate:
• Added 18.2 million square feet to its portfolio
21. Cincinnati Lenders
• Greater Cincinnati and Northern Kentucky banks:
• Mostly profitable in 2012
• Nearly half outperformed national average
• 22 of the 46 institutions with operations based in the
region had year-over-year net income growth of 19% or
more.
• Top banks posting profits here:
• PNC Bank
• Huntington National Bank
• JPMorgan Chase Bank
22. 2013 Forecast
• The Cincinnati market, by all accounts is getting healthier.
• Job levels are nearly back to pre-recession levels
• Strong demand for rental properties will keep the multifamily
sector as the safest option for investment here.
• Office properties will continue to be looked at as possible
redevelopment opportunities for repurposing into apartment
uses.
• An increase in demand should occur in the second half of the
year. Construction will continue to perk up and rental rates
should remain relatively flat.
23. 2012 volume:
12% above 2011
Now 50% above
market‟s Oct. 2009
low point
27. Risk Aversion Is High Among Investors
“A negative, or rather extremely conservative, mindset
is prevalent with the investors in the market. Many
investors are analyzing assets based on the 'what-
could-go-wrong' view versus spending time focusing
on 'what-could-go-right' and this has had an impact
on pricing and deal velocity."
Steve Timmel, senior VP of Colliers International
28. Risk Management is Now “Everyone‟s
Business”
• “What happens today that was not back in 2006 and 2007 is that
loan closings are being delayed for environmental issues, simply
because financial institutions are no longer willing to take on risk as
they once were.”
• “It has brought the opportunity—good or bad—to revisit decisions
we made during the good times….to rethink our approach to due
diligence.”
• “What has changed is the relationship with loan officers. Years
back, they tended to resist environmental due diligence. Now there is
much greater awareness.”
29. Feedback from EPs
• “My clients are demanding a more consultative approach to
ESA completion as opposed to only report delivery.”
• “In the past, Phase II equaled dead transaction. Now there is
more willingness to consider risking away issues through
Phase IIs.”
• “They want the thorough investigation but are not necessarily
allowing more time for it. The lenders are very competitive
with one another, so they don’t have the luxury of higher due
diligence fees or longer due diligence periods.”
Source: EDR Insight‟s Quarterly Survey of EPs.
31. 1. Focus on the Most Active Lenders
Status of CRE Lending by Source:
Commercial banks Flat/moderate growth
Government (Fannie/Freddie) Active
Credit Unions Expanding
Private Equity Expanding
Life Insurance companies Peaking
CMBS Securitizations Recovering
32. Focus On Who‟s Lending:
CoStar Analysis on Loan Growth by Bank
Size
% Change in Property
CRE Lending for the 5 Loans
Largest Banks in U.S. (>$50B) (2012 vs. 2011) Largest banks:
PNC Bank 15% Down 0.4%
JPMorgan Chase 13%
Bank of America 9%
U.S. Bank 2%
Branch Banking and Trust 2% Mid-size banks:
Wells Fargo 1% Up 7%
33. Watch for shifts toward other lending
sources:
Status of CRE Lending by Source:
Commercial banks Flat/moderate growth
Government (Fannie/Freddie) Active
Credit Unions Expanding
Private Equity Expanding
Life Insurance companies Peaking
CMBS Securitizations Recovering
35. • The U.S. SBA is one of only a handful of federal
agencies with a bigger budget in FY13 than in FY12:
• As much as $16 billion in loans through the popular
7(a) program
• 15 percent increase over FY12.
37. REITs Are Raising Capital:
Notable Private Funding Raisings in 1H2012
Firm Name Capital Raised
Blackstone $6.6 billion
UBS $1.8 billion
Carlyle Group $1.4 billion
Rockpoint Group $1.3 billion
GEM Capital $1.3 billion
McMorgan & Co. $977 million
38. REITs (cont‟d)
• Among REITs‟ top concerns are risks related to factors that
could devalue their properties, including environmental liability.
39. Retailer Category Planned Openings
through 2015
Dollar General Dollar 1,300
Family Dollar Dollar 1,000
Dollar Tree Dollar 600
CVS Drug 600
Walgreens Drug 400
Advance Auto Parts Auto 320
AutoZone Auto 125
40. Robust Forecast for New Store Openings
• U.S. retailer store-openings in 2012 reached 5-year high
• 81,990 new stores planned over the next 24 months
• Up 11 percent from the 2-year period ended in 2011
• Very focused in specific sectors, geographic areas
41. Foreign Investors and EB-5 Program
• Old program gaining new interest as avenue to stimulate
capital investment by foreign investors.
• Boston is a top target of foreign investors
• In FY12, the number of EB-5 projects approved was triple
FY09 levels.
• “Typically as a condition of closing, the borrower will
need to provide a clean Phase I environmental site
assessment report along with other due diligence items.”
• EB-5 presents a way for EPs to connect with key players:
• 209 Regional Centers in 40 states.
43. Strategies to Win
You get out there.
You stay on the cutting edge of technical knowledge.
You educate clients, connect the dots for them.
You embrace a “customer first” attitude.
You have an active business development function.
44. Strategies to Win
You get out there.
You stay on the cutting edge of technical knowledge.
You educate clients, connect the dots for them.
You embrace a “customer first” attitude.
You have an active business development function.
45. Strategies to Win
You get out there.
You stay on the cutting edge of technical knowledge.
You educate clients, connect the dots for them.
You embrace a “customer first” attitude.
You have an active business development function.
46. Education Is Key As Market Recovers
• New lending, investments are on the board for 2012.
• Banks, investment firms are replacing past layoffs with
junior staff.
• Leading to a “rustiness” in engaging Phase I ESAs.
• A learning curve as market adjusts to new risk aversion.
47. Topics for Client Education Efforts
• New E 1527 standard
• Vapor intrusion awareness
• Updates to policies like SBA, HUD, Fannie Mae
• Real-world examples/reminders of why environmental
due diligence is critical
48. Challenge of Education:
New E 1527 Standard
• How aware are you of the proposed revisions to the ASTM
Phase I ESA standard?
Very
aware, 12
“I have NOT been %
privy to the task
force or the
Somewhat,
pending changes Not at 25%
and would greatly all, 63%
appreciate any
information.”
~community
lender
49. Strategies to Win
You get out there.
You stay on the cutting edge of technical knowledge.
You educate clients, connect the dots for them.
You embrace a “customer first” attitude.
You have an active business development function.
50. Strategies to Win
You get out there.
You stay on the cutting edge of technical knowledge.
You educate clients, connect the dots for them.
You embrace a “customer first” attitude.
You have an active business development function.
51.
52. 2013 Forecast
• Improvements in both the cost and availability of
commercial mortgage capital are expected to drive
increases in 2013:
• Total investment transaction volume? +10 to 20%
• CMBS issuance? +50%
• CRE loan originations? +11%
53. Forecast for Risk Management
1. Continued focus on modeling the downside
2. More emphasis on technology, streamlining
3. Repurposing the oversupply of obsolescent properties
4. More deferred maintenance issues arising on refis or
neglected properties
5. Property Condition Assessments growing in importance
54. Parting Thoughts
• The market is recovering.
• Market uncertainty creates aversion to risk.
• New players and new markets are emerging.
• Think critically about where and how you can
compete most effectively.
55. Parting Thoughts
• The market is recovering.
• Market uncertainty creates aversion to risk.
• New players and new markets are emerging.
• Think critically about where and how you can
compete most effectively.
Be strategic and grow!
56. Dianne P. Crocker
Principal Analyst, EDR Insight
Research and Analytics:
www.edrnet.com/EDRInsight
Twitter:
@dpcrocker
Email:
dcrocker@edrnet.com
Editor's Notes
So that’s how things look from where I’m sitting…and that gives you a sense of the type of research we’re doing.Everything we publish is readily available here.And my contact info is there if you ever have any questions about the market or areas of opportunityIf you have an appetite for the types of information here, jot your email address on your evaluation and you’ll get our biweeklies With that, we have a few minutes for questions…Here during the break and after, so feel free to approach me or email me anytime.